The Natural Resources Defense Council filed a lawsuit Tuesday in the U.S. Court of Appeals for the D.C. Circuit arguing that millions of Americans have been unnecessarily exposed to the substance - found in everything from soda bottles and tuna cans to children's sippy cups - in the two years since it first petitioned the agency to outlaw bisphenol A.

Under the FDA's own rules, it was required to approve, deny or otherwise respond to the October 2008 petition within 180 days, the lawsuit said. After maintaining for decades that bisphenol A was safe, the FDA reversed position in January, saying exposure to the chemical was of "some concern" for infants and children. The FDA also said it would further study bisphenol A over the next two years.

"More research is always welcome and interesting, but at some point you have to say, 'We know enough,' and take action. We've reached that point," said Sarah Janssen, senior scientist at the NRDC's Environment and Public Health program in San Francisco.

The American Chemistry Council, the trade group representing makers of bisphenol A, said in a statement that "the scientific process and the public interest are both best served by allowing the U.S. Food and Drug Administration to complete its ongoing review of the science surrounding the safety profile of bisphenol A."

Doubts about chemical

Officials at the Food and Drug Administration said the agency does not comment on lawsuits.

First developed as a synthetic form of estrogen in the 1930s and later transformed into a plastic used in food containers, bisphenol A has come under increasing scrutiny not just for its connection to early puberty and other reproductive harms, but also to suppressed immune function, cancer, neurological delays and diabetes in studies of laboratory animals.

Most bisphenol A exposure in humans occurs when the substance leaches out of everyday plastics, such as the coatings on pizza boxes or in reusable water bottles.

Urine, breast milk

In 2004, the Centers for Disease Control and Prevention found bisphenol A in the urine of 93 percent of 2,500 test subjects, with the highest levels in those 6 to 11 years old. The chemical has also been detected in amniotic fluid, breast milk and umbilical cord blood.

A handful of governments around the world have moved to phase out and otherwise curb bisphenol A. But efforts to ban the chemical in the United States have had limited success.

In 2006, San Francisco became the first city in the country to prohibit bisphenol A in children's products. But the city backpedaled on the ordinance after legal pressure from retailers and chemical manufacturers.

A similar state bill sponsored by Sen. Fran Pavley, D-Agoura Hills (Los Angeles County), passed the Senate but was defeated in the Assembly on Monday.

According to some estimates, makers of bisphenol A have spent $5 million campaigning against the California measure.

Op-Ed Columnist

Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.

Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.

In 2008 and 2009, it seemed as if we might have learned from history. Unlike their predecessors, who raised interest rates in the face of financial crisis, the current leaders of the Federal Reserve and the European Central Bank slashed rates and moved to support credit markets. Unlike governments of the past, which tried to balance budgets in the face of a plunging economy, today’s governments allowed deficits to rise. And better policies helped the world avoid complete collapse: the recession brought on by the financial crisis arguably ended last summer.

But future historians will tell us that this wasn’t the end of the third depression, just as the business upturn that began in 1933 wasn’t the end of the Great Depression. After all, unemployment — especially long-term unemployment — remains at levels that would have been considered catastrophic not long ago, and shows no sign of coming down rapidly. And both the United States and Europe are well on their way toward Japan-style deflationary traps.

In the face of this grim picture, you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.

As far as rhetoric is concerned, the revival of the old-time religion is most evident in Europe, where officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, by improving business confidence. As a practical matter, however, America isn’t doing much better. The Fed seems aware of the deflationary risks — but what it proposes to do about these risks is, well, nothing. The Obama administration understands the dangers of premature fiscal austerity — but because Republicans and conservative Democrats in Congress won’t authorize additional aid to state governments, that austerity is coming anyway, in the form of budget cuts at the state and local levels.

Why the wrong turn in policy? The hard-liners often invoke the troubles facing Greece and other nations around the edges of Europe to justify their actions. And it’s true that bond investors have turned on governments with intractable deficits. But there is no evidence that short-run fiscal austerity in the face of a depressed economy reassures investors. On the contrary: Greece has agreed to harsh austerity, only to find its risk spreads growing ever wider; Ireland has imposed savage cuts in public spending, only to be treated by the markets as a worse risk than Spain, which has been far more reluctant to take the hard-liners’ medicine.

It’s almost as if the financial markets understand what policy makers seemingly don’t: that while long-term fiscal responsibility is important, slashing spending in the midst of a depression, which deepens that depression and paves the way for deflation, is actually self-defeating.

So I don’t think this is really about Greece, or indeed about any realistic appreciation of the tradeoffs between deficits and jobs. It is, instead, the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times.

And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.

June 28, 2010

The chairwoman of the House subcommittee responsible for foreign aid said she was stripping from pending legislation $3.9 billion in funding for Afghanistan following revelations that billions of dollars, including large amounts of U.S. aid funds, were flowing out of the country through Kabul's main airport.

Rep. Nita Lowey (D., N.Y.) called the revelations "outrageous," and Capitol Hill aides said she had the backing of Rep. David Obey (D., Wis.), the chairman of the full House Appropriations Committee.

"I do not intend to appropriate one more dime for assistance to Afghanistan until I have confidence that U.S. taxpayer money is not being abused to line the pockets of corrupt Afghan government officials, drug lords, and terrorists," Ms. Lowey said.

At least $3.18 billion in cash has been flown out of Afghanistan since 2007 after being legally declared to customs officers, according to documents reported Monday in The Wall Street Journal.

U.S. State Department spokesman P.J. Crowley said Monday that the Afghan government has gradually improved its ability to monitor the flow of money in and out of the country, and that officials planned to explain to Ms. Lowey's committee the improvements made by both Kabul and the U.S. to better account for aid money.

U.S. officials say they believe at least some of the cash is siphoned from Western aid projects and U.S., European and North Atlantic Treaty Organization contracts to provide security, supplies and reconstruction work for coalition forces in Afghanistan. NATO spent $14 billion in Afghanistan last year.

Profits reaped from the opium trade are also a part of the money flow, as is cash earned by the Taliban from drugs and extortion, officials say. Almost all the money is sent to Dubai, where wealthy Afghans have long parked their lawfully and unlawfully earned money.

Mr. Crowley said while some of the money leaving through the Kabul airport was likely from Afghanistan's illicit drug trade, the State Department believed most was the product of Afghanistan's growing economy and the need to move funds to a country with a better-functioning banking system, such as Dubai.

"I don't think we have any evidence at this point that the money flowing out of Afghanistan is U.S. money," Mr. Crowley said. "We think for the most part it's the result of legitimate commerce."

He added: "No one's saying there's not work to do, no one's saying there isn't some flow of illicit money leaving Afghanistan, but we think Afghanistan has made significant progress over the last several months."

More

In Kabul, the Afghan government said its top anticorruption watchdog will launch an investigation into the allegations. The Journal's article was discussed at an Afghan cabinet meeting Monday, and Afghanistan's High Office of Oversight and Anti-Corruption plans to open an inquiry into who is carrying the money, where it comes from and why it is being shipped out of the country, said Waheed Omar, a spokesman for President Hamid Karzai.

A U.S. official familiar with the money flows said it was good the Afghan government was finally discussing the matter publicly, but that there was little reason to believe the investigation would yield major revelations, because those believed to be sending out money include relatives of Mr. Karzai, senior officials in his administration and large Afghan companies with ties to the presidential palace.

Ms. Lowey's move, however, has the potential to be more problematic for the Obama administration, which is already facing significant questions about its Afghan strategy—particularly on issues of Afghan government corruption—from Democrats on Capitol Hill.

The House subcommittee is scheduled to debate the funding bill, which includes appropriations for the entire State Department and U.S. diplomatic operations, on Wednesday. Matt Dennis, a spokesman for Ms. Lowey, said the bill introduced for debate will now contain only humanitarian aid, which totals less than $100 million.

Ms. Lowey also said she would hold oversight hearings into the revelations after next week's July 4 recess.

Of the approximately $4 billion the administration requested in Afghan aid, the vast majority, or about $3.3 billion, was in economic aid. The rest of the money that will be stripped from the bill was largely funding for drug interdiction and military exchange programs, Mr. Dennis said.

The Senate subcommittee responsible for foreign aid has yet to schedule a date for its deliberations, and the money could be put back in when the Senate and House bills are reconciled.

But the removal marks the latest in a series of moves on Capitol Hill, including increasingly vocal criticism of the war effort, that have begun to signal weakening political support for the conflict.

Afghan and U.S. officials say the sums legally leaving through Kabul's airport could amount to about $3.65 billion a year, more than a quarter of Afghanistan's $13.5 billion gross domestic product.

The money is being shipped through private money-transfer networks known as "hawalas," which have been used for centuries across the Muslim world as a fast, cheap and legitimate way to transfer funds.

The murkiness of the money's origins prompted U.S. officials to begin investigating the cash flow. A special U.S.-trained Afghan anticorruption unit under the Interior Ministry has also been investigating.

Separately, the Afghan parliament Monday confirmed Gen. Bismullah Khan, the former army chief of staff, as the country's new interior minister overseeing law enforcement and police. The previous minister, Hanif Atmar, was fired this month by President Karzai amid disagreements over the country's security policies.Four other ministers were approved, but two of Mr. Karzai's nominees were rejected. They include the transport minister-designate, Daud Ali Najafi, who oversaw Afghanistan's election commission during last year's flawed presidential election.

Altogether, seven ministerial posts remain vacant. They have been open since parliament rejected most of President Karzai's Cabinet picks in the wake of last year's election.

Also still open is the top job at the country's intelligence agency. Its previous occupant, Amrullah Saleh, was fired at the same time as Mr. Atmar.

Wonderful piece of writing, John. I agree with all you say especially the dumb strategic directions we are taking with our scarce financial resources given our high private and national DEBT overhang.

I've been against this Afghan venture from the start and felt immediately Afghanistan is formed of a provincially ancient tribal culture of decentralized power centers we can't possibly socially engineer to our ideas or defeat in battle ... we who by far aren't the best social engineers in our own country! It was Obama's one gigantic misjudgement. I'm very concerned and becoming more cynical by the day over the deepening structural, social- economic instability in the states intensified by an ideologically polarized political system. I too saw Friedman's CNN interview with Zakaria and thought he was hitting the nail on the head in more ways than one on our disastrous misdirections.

Here's Obama and company preaching to European countries not to cut costs back too much or do so at the same time for fear of bringing a worsening recession back. He and the U.S. economists don't seem to realize that the mature countries in Europe have the financial-social flexibility to simultaneously cut back and reinvest in their economies because they don't stay in denial of their weaknesses and are not over-stretched on too many fronts. But the U.S. is stuck with low taxes, low social nets, exhorbitant Defense expenditures and a global military establishment it can't afford in the face of structurally stagnating job development at home, decayed infrastructure and a huge, costly, polluting fossil fuel dependence. We simply are overstating our abilities, ignoring our limitations and the real priorities to truly get our house in order. This has been an ancient formula for the decline of past civilizations. We remain blind to this fact.

Just wanted to say how much I enjoyed your writing, John. Here's hoping the general public will awake SOON to our bloated, bankrupting military adventures and that your words reach a broad audience!

Tom Friedman came up with this metaphor on Fareed Zakaria's GPS Sunday show. The US in Afghanistan is like a jobless couple trying to adopt a special needs child. 46 out of 50 US states are bankrupt, the Federal government is deeply in debt, yet the US is "committed" to fighting a war in Afghanistan that doesn't seem to have any purpose or any chance of success. Originally the US went into Afghanistan to "get" Osama bin Laden whose name has hardly been mentioned by the current administration or anybody else for years. Now the war has morphed into a counterinsurgency which means that we need to build waste water plants and power stations in addition to winning the hearts and minds of the people and defeating the Taliban. This always happens in unwinnable wars: we decide to do nation building instead of winning the unwinnable. It puts a nice patina on a ridiculous situation and covers up a lack of knowing what the hell we're there for. And it saves face. The world's greatest superpower can't be seen as losing a war to the world's most retarded country, now can it?

Friedman asks "why do we have to train the Afghan army? The Taliban don't need any training, and they're fighting us to a draw. They're illiterate, they can't even read a map, yet they're being successful and the US is not." He says these are the questions even a child would ask. I agree. A child might wonder 1) why we're using military force to win the hearts and minds of the people instead of just building infrastructure without the guns being involved, and 2) why we are training an Afghan military force when the Afghans have been doing nothing but fighting foreign intruders for hundreds of years. Don't they have enough military training already? And a child might ask why we are fighting them with military equipment which costs millions of dollars that can be blown up with a $10. IED?

When the US is just as likely to be struck by a terrorist who happens to be a US citizen, the idea of spending hundreds of billions of dollars trying to wipe out al Quaeda and ending up killing hundreds of innocent civilians instead is absolutely ridiculous. Meanwhile, other contries like China are building infrastructure in Afghanistan at the same time we're fighting a war there. They are the ones winning hearts and minds. We could be doing the same thing too for far less money and minus the military prescence. Hasn't the Pentagon noticed - al Quaeda isn't even there any more? They're in Somalia and Yemen among other places. The military always has to have some rationale for their interminable claim on US Treasury funds. Why it's unthinkable that the military budget should be slashed; better to make up some excuse to stay in Afghanistan forever.

KABUL, Afghanistan — Behind an electrified fence, blast-resistant sandbags and 53 National Police outposts, the Afghan surge is well under way.

But the foot soldiers in a bowl-shaped valley about 20 miles southeast of Kabul are not fighting the Taliban, or even carrying guns. They are preparing to extract copper from one of the richest untapped deposits on earth. And they are Chinese, undertaking by far the largest foreign investment project in war-torn Afghanistan.

Two years ago, the China Metallurgical Group Corporation, a Chinese state-owned conglomerate, bid $3.4 billion — $1 billion more than any of its competitors from Canada, Europe, Russia, the United States and Kazakhstan — for the rights to mine deposits near the village of Aynak. Over the next 25 years, it plans to extract about 11 million tons of copper — an amount equal to one-third of all the known copper reserves in China.

While the United States spends hundreds of billions of dollars fighting the Taliban and Al Qaeda here, China is securing raw material for its voracious economy. The world’s superpower is focused on security. Its fastest rising competitor concentrates on commerce.

S. Frederick Starr, the chairman of the Central Asia-Caucasus Institute, an independent research organization in Washington, said that skeptics might wonder whether Washington and NATO had conducted “an unacknowledged preparatory phase for the Chinese economic penetration of Afghanistan.”

“We do the heavy lifting,” he said. “And they pick the fruit.”

The reality is more complicated than that. The Chinese bid far more for the mining rights to the Aynak project and promised to invest hundreds of millions more in associated infrastructure projects than other bidders. It is a risky venture that has not yet proved to be economical, and it has already been dogged by allegations of bribery.

But the Aynak investment underscores how China’s leaders, flush with money and in control of both the government and major industries, meld strategy, business and statecraft into a seamless whole. In a single move, Beijing strengthened its hold on a vital resource, engineered the single largest investment in Afghan history, promised to create thousands of new Afghan jobs and established itself as the Afghan government’s pre-eminent business partner and single largest source of tax payments.

So I ask you - who is winning the hearts and minds of the Afghani people - the US who is mainly killing there and by the way is building a few water treatment plants or China who is investing big time, becoming a business partner and building infrastructure? Why isn't China worried about bin Laden, al Quaeda or the Taliban? I hate to say it but the US is there like it was in Vietnam, like it is in Iraq - mainly to save face. They've staked their rep on "winning" in Afghanistan. Meanwhile, the world goes on with China taking the lead in Afghanistan and elsewhere on a peaceful mission right in the middle of a war. How much more ridiculous does it get?

And then there is Greg Mortenson. One individual, Greg Mortenson, has built hundreds of schools there. Why do we think it takes the US military to build infrastructure? This is just so dumb, it's unbelievable! And to think a smart guy like Obama got sucked into this mess. He and Petraeus should use all their smarts to buy off the Taliban like they bought off the "bad guys" in Iraq (under the guise of a surge), declare victory and get out. Most Americans believe we "won" in Iraq although the same crap is still going on there - mosques being blown up, millions without electricity etc.

They should put Greg Mortenson in charge of an agency to build schools in Iraq, give him a billion dollars and let it go at that.

The US spends a pittance on Homeland Security and a paltry sum on US infrastructure while it devotes the major part of its resources to military adventurism. The US is spending $1 billion per year for every soldier in Afghanistan! Shouldn't that give us pause? Shouldn't we reevaluate our priorities? Then we have a huge recent victory in the Senate to pass a $15 billion jobs bill? [Ed. note: A more recent unemployment extension was voted down in the Senate!] That's just 15 soldiers worth a year in Afghanistan! It's nothing. And while the US military destroys Afghanistan and kills civilians, one guy is going around and building schools. In "Three Cups of Tea" Greg Mortenson tells about his experiences in Afghanistan that led him to go back there and build schools - one at a time. If one guy can do this kind of good, how much good could the US government with all its might and resources do if it chose to, instead of choosing to kill civilians in a quest for the fool's gold of eliminating Taliban leadership?

Counterinsurgency is just another name for "let's just keep a military prescence there forever." Meanwhile, the peaceful world is just going on without us including China which is cutting deals in Afghanistan in the midst of a war in which the US thinks it's the central actor. China is simply ignoring us, and Greg Mortenson is building schools without taxpayer money. Go figure!

And I must say that the Chinese form of state capitalism allows it to do things that the US can't. The US can get unlimited amounts of money for its military, but it can't (as a nation) spend billions for peaceful purposes or cut business deals like China can because that would be socialism. The US model requires that only private enterprise can cut business deals. The Chinese model allows cooperation between business and government; government can even direct business and that's why China (as a nation) can be in Afghanistan extracting raw materials and building infrastructure. The US model would not let the US government be involved in such proceedings. Instead, billionaire philanthropists like Bill Gates and Warren Buffet would have to do that. But they're more interested in health issues and working in "pacified" nations.

Sun Tzu, the Chinese philospher who wrote The Art of War emphasized the Taoist approach of obtaining one's goals without firing a shot if possible. China is well on its way to becoming the 21st century's ascendant nation uses Sun Tzu's principles. China is running its chief rival into debt while the US fights futile wars. At the same time China is tying up valuable world resources by peaceful means not wasting a yuan on ammo. A totally brilliant strategy!

Mark McNeilly writes in Sun Tzu and the Art of Modern Warfare that a modern interpretation of Sun and his importance throughout Chinese history is critical in understanding China's push to becoming a superpower in the 21st century. Modern Chinese scholars explicitly rely on historical strategic lessons and The Art of War in developing their theories, seeing a direct relationship between their modern struggles and those of China in Sun Tzu's time. There is a great perceived value in Sun Tzu's teachings and other traditional Chinese writers, which are used regularly in developing the strategies of the Chinese state and its leaders.

Sun Tzu in "The Art of War" said that the best way to overtake your enemies is without even firing a shot. This is happening before our eyes as the Chinese have overtaken the US economically, effectively turning the US into a client state. The role of Europe in providing adequate safety nets for its citizens while not investing heavily in weaponry has had somewhat the same effect ironically. The Europeans do not have the same fear of terrorism evidently that the US does. Why else are they not sending a whole lot of troops to Afghanistan? It's as if they're saying "well, if you (the US) want to waste your money on military adventures, go ahead, but we'd rather spend ours on the welfare of our people."

If the US is foolish enough to continue espousing "free trade" when the result has been massive trade deficits and the export of its manufacturing base to China, then the US has become a sclerotic old man who can't act with any intelligence in his own interests. If the US political system allows one party to say "no" to everything when it is of paramount importance to act now with no time to waste, then the US is only hastening its own decline.

After 41 Years, a Belated Victory for Butter

The last time America found itself in a budget debate pitting domestic priorities against war expenditures, Richard Nixon was in the White House and David Obey was the youngest member of Congress—an anti-war liberal whose insurgent campaign unexpectedly vaulted him into the House seat vacated by the hawkish president’s new defense secretary. In those dark days of the late 1960s and early 1970s, as Obey was still learning his way around Washington, it was the guns of Vietnam and the Cold War versus the butter of the Great Society and the War on Poverty—and despite Obey’s protests, guns won the day.

“President Nixon issued a call to counterrevolution at home,” summed up Time magazine in 1973, noting that while the Republican administration was increasing the Pentagon budget, it was proposing the “abolition or deep cutting of more than 100 federal grant programs that have benefited the unemployed, students, farmers, veterans, small businessmen, the mentally ill and tenants in federally aided housing.”

The resulting body bags and cuts to homeland investment were, of course, devastating—which is why it is fitting that Obey is choosing to end his congressional tenure where he started it: presciently on the side of butter in a 21st-century reprisal of the ancient debate. And this time, the Wisconsin Democrat’s seniority puts him in a far more powerful position to press his case.

Over the last decade, Obey has been methodically campaigning against the Iraq war and the endless Afghanistan occupation, saying their rationales are weak, their prosecution inept and their deficit-financed costs unaffordable in the face of unmet domestic needs. For years, he has valiantly championed bills to legislate withdrawal timetables and war surtaxes. Now, with President Obama defiantly pushing a plan to boost Afghan war funding at the potential expense of economic aid on the home front, Obey has deftly replaced the scalpel strokes of proactive legislation with the blunt force of filibuster.

According to Politico, Obey last week “drew a direct link between war funding and progress on domestic priorities” with his announcement that as Appropriations Committee chairman, he will “withhold action on the war funds until there (is) some resolution on a major economic relief bill extending jobless benefits.”

Like clockwork, the move was met with hypocritical hysteria. The same Republican Party that bewails deficits responded with a letter asking Defense Secretary Robert Gates to champion the deficit-exploding war funding bill in order to avoid “undermining” the military. Gates, despite having just called for defense spending cuts, obediently complied—and on Republicans’ insipid terms that perniciously question war critics’ loyalty to our soldiers.

“Gates to Congress: Stalling on War Funding Will Hurt U.S. Troops,” read the Fox News headline after he publicly echoed the GOP demands.

The Nation’s Chris Hayes has written that such tripe boils down to “You’re either with the war or you are against the troops”—and as the bloated Pentagon budget proves, that message has thwarted Obey for most of his life.

Until, perhaps, now.

Yes, just as Obey prepares to retire, there are signs that his crusade is winning converts. For instance, Oklahoma Republican Sen. Tom Coburn is using his position on President Obama’s deficit commission to focus attention on Pentagon profligacy. Similarly, Politico reports that “key tea party players (are) expressing a willingness to put the Pentagon budget on the chopping block.” And rank-and-file congressional Democrats, once cowed by war proponents’ saber rattling, are increasingly echoing Obey’s rhetoric.

Whether or not the cacophony stops the Pentagon’s latest blank check is less important than Obey having finally rekindled an honest discussion about guns and butter. In a storied 41-year career of venerable accomplishments, that is the most profound achievement of all.

David Sirota, a former spokesperson for the House Appropriations Committee, is the author of the best-selling books “Hostile Takeover” and “The Uprising.” He hosts the morning show on AM760 in Colorado and blogs at OpenLeft.com. E-mail him at ds@davidsirota.com or follow him on Twitter @davidsirota.

The critically-acclaimed director discusses his upcoming documentary, "South of the Border."

June 26, 2010 |

Critically-acclaimed Hollywood Director Oliver Stone dropped by our studio for a Brave New Conversation, where I spoke with him about his latest documentary South of the Border, scheduled to be released in more than 30 countries this month. South of the Border begins by exploring the role that the corporate-owned mainstream media in the U.S. and Venezuela have played in shaping American's perspectives on South America, beginning with clips of the attempted coup on Venezuela's Hugo Chavez. In the Brave New Conversation, Stone describes the South American press:

The press [in South America] is totally owned privately, and most of that press, unlike most Americans realize, is anti-reform. Anybody who comes along and wants to change anything is castigated in the press. Chavez is one example: They kill him every day. The press is vibrant, it's oppositional, calls for his resignation, calls him a madman, and sometimes calls for an overthrow of the government. This is going on everyday and in America they say there's censorship. We're crazy; if we had a press like that, it'd be Fox News on steroids.

South of the Border offers a unique perspective on Latin America, one of a quiet revolution taking place where democratically-elected presidents have braved the strong arm of the US and its policies throughout the region by daring to oppose money for the War on Drugs and structural adjustment policies of the International Monetary Fund, making history with their efforts. Oliver Stone interviews Brazil's Lula da Silva, Argentina's Cristina Kirchner and her husband, ex-President Nestor Kirchner, Ecuador's Rafael Correa, Fernando Lugo of Paraguay, Evo Morales of Bolivia, Castro of Cuba, and Hugo Chavez of Venezuela: Leaders who are committed and unified in strengthening their countries' economic engine without the interference from the US.

To give you a glimpse of what the US has done in Latin America, Stone explains the following:

The only two allies we have left are Peru and Colombia -- both bad guys, because we've given Colombia 6 billion dollars to fight this so-called drug war. The paramilitaries in Colombia have killed close to maybe 30 thousand -- we don't even know -- maybe 120,000, maybe even 200,000 people have vanished in Colombia over the last 20 years. It's a horrible war.

South of the Border was an eye-opening experience, and I hope people will see it. I thought I was well-informed about South America before the film, but I came away with a whole new perspective. This is what is so wonderful about films that make a difference: you go in with one set of eyes and perceptions and come out thinking and feeling entirely different.

Robert Greenwald is the director/producer of "Outfoxed: Rupert Murdoch's War on Journalism," as well as many other films. He is a board member of the Independent Media Institute, AlterNet's parent organization.

Rich people complain about the fact that they are paying more than their fair share of Federal income taxes. If you think that everyone, rich or poor, should pay the same amount of income tax, this is true. Of the $8.8 trillion paid in income tax in 2007, the top 1%, income wise, paid over 40% or $451 billion according to an IRS report. (Note: this information was provided by Frank Thomas.) This was more than the bottom 95% paid. However, for all they paid, they still made tremendous gains in income and wealth while the middle class stagnated, and tax policies were largely the reason why the rich got richer while the poor got poorer.

The fact of the matter is that, as late as 1980, the top 1 percent by income in the United States had about nine percent of total national income. But since then, you’ve had increasing concentration of income and wealth to the point that by 2007 the top 1 percent was taking home 21 percent of total national income. Now, when they’re taking home that much, the middle class doesn’t have enough purchasing power to keep the economy growing. That was hidden by the fact that they were borrowing so much on their homes, they kept on consuming because of their borrowing. But once that housing bubble exploded, it exposed the fact that the middle class in this country has really not participated in the growth of the economy, and over the long term we’re not gonna have a recovery until the middle class has the purchasing power it needs to buy again.

The top tax rate under Eisenhauer was 92%; under Nixon it was 77%. When Reagan entered office, it was 69%; when he left, it was 28%. Under Reagan the national debt tripled due to the fact that he had dropped income tax rates so low. Clinton raised tax rates to 39.6%, had a booming economy and actually balanced the Federal budget and paid down the national debt!

There are two purposes for collecting taxes: 1) to fund the government to do the various things that we want government to do and 2) to promote economic growth while lessening income inequality. Therefore, tax rates have to be high enough in general so that the government doesn't go into debt and 2) tax rates have to be progressive enough that income and wealth inequality doesn't increase. The top tax rate today is 35%. But wealthy people pay on average an even lower rate due to the fact that most of their income is in capital gains which are taxed at 15%.

In addition when tax rates were 92% under Eisenhauer CEO pay was aoround $2 or $3 million. This is because higher amounts would have been essentially confiscated and so money was plowed back into the business instead of being dispensed as CEO pay. Today most CEO pay is in the form of stock options which means that getting stock prices higher is the main concern of most CEOs and, when they cash in those options, they only pay taxes at the 15% capital gains rate. The fairness of the tax structure needs to be made clearer in that the first increment of money made by all people is taxed at the same rate while higher increments are taxed at progressibvely higher rates. What that means, for example, is that billionaires should pay the same rate on their first $100,000. of income as do those whose total income is $100,000. Fair enough? It's only on higher increments, say the second and third increments of $100,000. and so on that billionaires should pay a higher rate of taxation. Lumping all of this together into one overall rate hides the fact that different increments of income, as they should be, are taxed at different rates. Obama is starting to make this distinction clear by saying that he will raise taxes only on those making more than $250,000. a year while keeping taxes on those making less than $250,000. the same as they are. He could make the distinction even clearer by pointing out that those making over $250,000. are in fact taxed at the same rate as those making less than $250,000. on the first $250,000. of their income. It is only on higher increments that they should be taxed more.

The net result of the lowering and deprogressivizing of the tax rates over the last 30 years is that 1) the government has gone broke and 2) income and wealth inequality has continued to increase. So what should be done to get our fiscal house in order? The government needs to raise top tax rates while keeping rates on the middle class and the poor at the same level or even lowering them. The government also needs to find other ways to raise revenues and reduce expenditures such as eliminating subsidies to oil companies and corporate farmers and taxing financial transactions. Ending wars and reducing the size of the military-industrial complex would also produce large cost savings. The government needs to be run more like a capitallist enterprise, that is, it needs to be in the business of capital accumulation instead of capital depletion which Repuiblican policies of lowering taxes have produced.

Republican policies of giving tax breaks to the rich need to be eliminated. Even though the rich pay most of the income taxes, the rate at which they are now paying isn't sufficient to prevent widespread inequality and to prevent the government from taking on massive debt while their percentage of the national income continues to increase. Eliminating fraud, abuse and war would also save the government money. State capitalist economies, such as China and to a lesser extent some European economies, are building government wealth while the US model is resulting in increasing debt. What this means is that those nations as nations, despite the fact that they contain a lot of poor individuals, are growing stronger while the US as a nation, despite the prescence of a lot of rich individuals, is growing poorer. When the state acts as a capitalist, that is, the state is in the business of accumulating money or capital, that state will eventually dominate states like the US whose national model seems to be to let rich individuals and corporations cannibalize the national treasury for their own private purposes. Lobbyists and recent Supreme Court decisions have promoted the interests of the rich while neglecting the interests of the poor, the middle class and the government itself, and this means that the US government, as a capitalist, will find itself not only increasingly poor but eventually bankrupt. Right now it's in the position of having a credit card with no limit, it can borrow as much as it wants to. But some day that will no longer be the case, as many individuals have recently found out, and the chickens will come home to roost. The resultant austerity will not be pleasant for the American people nor for those whose interests reside chiefly in the military-industrial complex.

The recession still has more damage left to do. From 2007 to 2009, about 2.5 million foreclosures were completed throughout the country, and now, millions more homes are facing the same fate. About 1 in 6 Latino homeowners, and 1 in 10 Black homeowners have either lost their homes already or are at “imminent risk,” compared to 7 percent of White owners, according to the Center for Responsible Lending. The organization’s new analysis of foreclosure statistics from 2007 to 2009 confirms previous research, but the timing of the report is a bleak reminder that the economic crisis has not yet bottomed out in many areas.

But really, we should have seen it coming. According to the Center's research, homeowners of color were set up for a shock from the very beginning:

First, not only were borrowers of color more likely to receive subprime loans than white borrowers, but within the subprime market, borrowers of color were more likely to receive the most expensive loans and were more likely to receive subprime terms associated with increased default risk, such as prepayment penalties. Previous research has shown that African-American and Latino borrowers were about 30% more likely to receive the highest-cost subprime loans relative to white subprime borrowers with similar risk profiles and that subprime loans in communities of color were more likely to carry prepayment penalties than subprime loans in majority communities.

The reasons behind the crisis are also sadly predictable: a shady, virtually unregulated market that allowed lenders to prey on low-income communities, the government's persistent failure to enforce fair-lending anti-discrimination laws, and the economic desperation that pushed homeowners to refinance to wring more money from the one asset they thought they could lean on.

And the seeds of the next crisis have already been sown, as Black and Latino households find themselves struggling to climb out of a hole that is widening under systemic poverty, joblessness and state and local budget crises. The Center points out that in addition to having far less wealth than whites in general, people of color tend to have more wealth concentrated in housing compared to white families with relatively diversified assets. This leaves families of color even more exposed to market volatility.

Overall, the study found, "though African-American and Latino borrowers received 25.8% of all loans to low-income borrowers, we estimate that they were affected by 32.9% of completed foreclosures for this group." The wealthier brackets actually showed larger gaps in the share of owner-occupied foreclosures versus originations. The highest disparity ratios for Blacks and Latinos were found among high-income homeowners.

So how do we get out of this mess? Fair-lending groups have called for stronger foreclosure-mitigation policies and backed the plain-vanilla initiatives Congress has mulled in recent months to start reregulating the financial services industry. Those proposals don't specifically target communities of color, but one insight in the report's conclusion challenges the reactionary climate that prevails on the right:

policymakers must vigilantly guard against efforts to use the current crisis as an excuse to roll back policies designed to support homeownership for disadvantaged communities. Indeed, in the wake of this crisis, communities that have historically been the beneficiaries of such policies will need access to responsible and fairly-priced credit more than ever as they seek to rebuild financial security.

Michelle Chen's work has appeared in AirAmerica, Women's International Perspective, Extra!, Colorlines and Alternet. She is a regular contributor to In These Times' workers' rights blog, Working In These Times. She also blogs at Racewire.org.

U.S. President Barack Obama gestures prior to a 2010 G8 Summit photo with the ''My Summit 2010 Youth'' at the Deerhurst Resort at Muskoka in Huntsville, Canada, June 25, 2010.

Credit: Reuters/Saul Loeb/Pool

TORONTO (Reuters) - President Barack Obama, fresh from a win on a sweeping overhaul of Wall Street regulations, on Saturday urged Congress to take up his proposal for a $90 billion, 10-year tax on banks as the next step in reform.

Obama wants to slap a 0.15 percent tax on the liabilities of the biggest U.S. financial institutions to recoup the costs to taxpayers of the financial bailout.

"We need to impose a fee on the banks that were the biggest beneficiaries of taxpayer assistance at the height of our financial crisis -- so we can recover every dime of taxpayer money," Obama said in his weekly radio and Internet address.

Obama, who is in Canada to attend gatherings with leaders of the world's biggest economies, also used the address to welcome a deal by congressional negotiators on a historic rewriting of U.S. financial regulations.

Obama hopes to tout the changes as a model for other countries at the Group of 20 summit on Saturday and Sunday.

"I hope we can build on the progress we made at last year's G20 summits by coordinating our global financial reform efforts to make sure a crisis like the one from which we are still recovering never happens again," he said.

The financial regulation package would set up a new financial consumer watchdog, create a protocol for dismantling troubled financial firms and mandate higher bank capital standards, with the aim of avoiding a repeat of the 2007-2009 financial meltdown.

The bill, marking the biggest changes to the financial regulatory structure since the 1930s, still needs final approval from both chambers of Congress.

Obama, who hopes to sign the legislation by July 4, urged Congress to push the bill "over the finish line."

With congressional elections looming in November, Obama hopes the financial reform and the bank tax idea will resonate with U.S. voters furious over Wall Street risk-taking that led to the financial meltdown and the worst recession in decades.

Some lawmakers have indicated they are receptive to the bank tax proposal but others have questioned whether it is fair to impose the tax on banks that have already repaid money from the Troubled Asset Relief Fund to make up for losses by American International Group Inc and General Motors.

Financial companies with more than $50 billion in assets and hedge funds with more than $10 billion in assets will be hit with the new levy upon enactment and lasting until 2020.

June 25, 2010

WASHINGTON — The United States plans to deploy two drone aircraft along the Texas-Mexico border as part of a new effort to stem organized crime and illegal immigration, Homeland Security chief Janet Napolitano said Wednesday.

Predator drones will be used to patrol the border and in nearby areas in the Gulf of Mexico, once Congress approves the 500 million dollars President Barack Obama has requested, Napolitano said in a Washington speech. (AP)

The two Predator drones will be used to patrol the border and in nearby areas in the Gulf of Mexico, once Congress approves the 500 million dollars President Barack Obama has requested, Napolitano said in a Washington speech.

"These types of flights aren't necessary everywhere," she said in comments to the Center for Strategic and International Studies. "But this is the case in the Texas border."

The United States currently has four drones patrolling the border with Mexico in Arizona and one in the northern border with Canada in the state of North Dakota, according to the Department of Homeland Security.

Napolitano said the new aircraft are part of a reinforcement of border patrol efforts including one thousand additional agents and 60 investigators.

"Over the past 18 months, this administration has devoted more resources -- including manpower, technology and infrastructure -- to the Southwest border than at any point in America's history," she said.

Texas Governor Rick Perry had requested delivery of the planes, which the US used extensively in Afghanistan and Pakistan.

The Obama administration is seeking to step up security as it presses for a comprehensive immigration reform measure that likely would allow many of the millions of illegal migrants in the United States to legalize their status.

Many Republican lawmakers say no immigration measure can be considered unless the federal government can ensure security along the southern US border to prevent a spillover of violence from Mexico.

Napolitano also announced a number of new cooperation agreements with law enforcement in non-border states to send personnel to southwest border.

DHS said it is working on a system that will fully link the information systems of all state, local and tribal law enforcement entities operating along the southwest border with those of the federal government.

"Border security is primarily a responsibility of federal government," she said. "We cannot have 50 different state legislations. It will not work."

The remark was aimed at a controversial Arizona law that allows police to question persons suspected of being illegal immigrants.

The agency said it was developing "Project Roadrunner," a license plate reader recognition system aimed at detecting drug trafficking and associated illegal activity along the border.

In a related comment in Congress, Democratic Senator Robert Menendez said the security situation will influence the debate on immigration.

"There are those in the Senate who believe we should basically militarize our borders and until we do, until we meet some standard of militarization, we cannot tackle the issue of comprehensive immigration reform," he said.

Venezuela has said that it will nationalize 11 oil rigs owned by a US company.

The takeover of the rigs, owned by the Helmerich and Payne oil firm, is the most recent move in a program of nationalization as part of the socialist 'Bolivarian revolution' of Hugo Chavez, the president.

Chavez's socialist revolution has led to banking and power assets being nationalised. Rafael Ramirez, the Venezuelan oil minister, said on Thursday that the facilities were being taken over to bring them back into production. (AFP)

The rigs have been out of use for months due to a dispute over payments by PDVSA, the state oil company.

Helmerich and Payne, which owns other rigs in the country, had said that it would not work at the sites until they were paid the $49 million it was owed. It did not immediately comment on the planned nationalization.

Rafael Ramirez, the Venezuelan oil minister, said on Thursday that the facilities were being taken over to bring them back into production.

'Weakening government'

Ramirez said that firms like Helmerich and Payne who had refused to put their rigs into production were aiming to weaken the government.

"There is a group of drill owners that has refused to discuss tariffs and services with PDVSA and have preferred to keep this equipment stored for a year," he said.

"That is the specific case with US multinational Helmerich and Payne."

Venezuela has suffered a reduction in oil output since 2008.

Despite having significant oil reserves the country is undergoing economic struggles, with power shortages and low food resources affecting Chavez's promises to pull people out of poverty.

His government has nationalized telecommunications, power and steel firms during the last three years.

The government also nationalized Banco Federal, a mid-sized bank, last week giving the state control of 25 per cent of the banking sector.

Legislative elections are to be held in September and Chavez needs to reverse popularity losses due to Venezuela's recession before then

Oil-giants such as Halliburton, Schlumberger and Baker Hughes also work in Venezuela, although the former pair have avoided public disputes with the government.

The Community Reinvestment Act (CRA) of 1977 only required banking institutions to issue mortgages in low income neighborhoods. The Gramm-Leach-Bliley Act of 1999 deregulated the banking industry and in particular did not require private mortgage companies to be subject to the CRA. These mortgage companies originated about 85% of subprime loans. So when conservatives blame the CRA for the housing crisis and the subsequent financial meltdown of 2008, they don't know what they're talking about. After the loans were originated, they were sold off to Wall Street banks who repackaged them as collateral debt obligations (CDOs), turned them into bonds, had them rated AAA by credit rating agencies such as Moody's and Standard and Poor's and then sold them off to investors such as pension funds.

Our second point is a matter of the originating entity. When considering the potential role of the CRA in the current mortgage crisis, it is important to account for the originating party. In particular, independent nonbank lenders, such as mortgage and finance companies and credit unions, originate a substantial share of subprime mortgages, but they are not subject to CRA regulation and, hence, are not directly influenced by CRA obligations.

...

Using loan origination data obtained pursuant to the Home Mortgage Disclosure Act (HMDA), we find that in 2005 and 2006, independent nonbank institutions—institutions not covered by the CRA—accounted for about half of all subprime originations. Also, about 60 percent of higher-priced loan originations went to middle- or higher-income borrowers or neighborhoods, populations not targeted by the CRA. In addition, independent nonbank institutions originated nearly half of the higher-priced loans extended to lower-income borrowers or borrowers in lower-income areas.

In total, of all the higher-priced loans, only 6 percent were extended by CRA-regulated lenders (and their affiliates) to either lower-income borrowers or neighborhoods in the lenders' CRA assessment areas, which are the local geographies that are the primary focus for CRA evaluation purposes. The small share of subprime lending in 2005 and 2006 that can be linked to the CRA suggests it is very unlikely the CRA could have played a substantial role in the subprime crisis.

Subprime lending was at its height from 2004 to 2006. More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions not subject to the CRA. The loan originators immediately sold their loans into the secondary market, received their loan origination fee and were done with them. So sticking people with adjustable rate loans (ARMs) and other loans which reset to higher interest rates in a couple years had nothing to do with the CRA. The deregulation of the banking industry directly led to the expansion of the subprime lending industry, and this led to liar loans (loans with no proof of income required) and other exotic loans which borrowers had no hope of repaying. They were told that when the loans reset to higher interest rates, they could always refinance or sell their homes at a profit. Thus it was aggressive salesmanship fueled by substantial commissions in an unregualted environment that was responsible for the huge increase in subprime loans.

There were outstanding subprime loans of $1.3 trillion in 2007. Some Wall Street wheelers and dealers realized that the securitized subprime loans rated triple A were in actuality triple B because they consisted of liar loans also known as "stated income" loans and started finding ways to bet against them or selling them short. It was for this purpose that credit default swaps (CDSs) were invented. CDSs were a relatively inexpensive way to bet against the bonds consisting of subprime mortgages. Later when these mortgages went into default, the CDSs paid off big time, and in fact caused AIG, the issuer of most of the CDSs to teeter on the edge of insolvency until they were bailed out by the Federal government. The $700 billion that went into the TARP program was used to bail out insolvent institutions who had sold insurance on triple A rated bonds consisting of securitized subprime mortgages. The securitization process converted the mortgages into bonds.

So the fact of the matter is that the CRA had little or nothing to do with the housing crisis and the subsequent financial meltdown. That had to do with the availability of cheap money due to Fed chief Alan Greenspan's policies and the sales abilities of mortgage brokers who reaped big commissions every time they signed somebody up for a subprime mortgage. Smart people on Wall Street knew that the bonds based on these mortgages were likely to default and so they bought derivatives that would pay off when that occurred. Institutions that sold insurance on those bonds in the form of CDSs did not have the capital to pay off on the CDSs they sold again due to deregulation. Since they were deemed too big to fail, the taxpayers had to bail them out when their bills came due. The gamblers who went short on subprime mortgage backed securities made out big time as the Federal government covered all their bets.

June 24, 2010

Senate Majority Leader Harry Reid (D-Nev.) said Thursday that Democrats are giving up on trying to break a Republican filibuster of a bill to reauthorize several expired domestic aid programs, including extended unemployment benefits.

"We're going to move to the small business jobs bill," said Reid when asked what would happen if the vote to move forward with the "tax extenders" bill fails, as it is expected to do on Thursday afternoon. "We can't pass it until we get some Republicans... It's up to them."

[UPDATE: 6:18 PM: The bill was defeated, 57 to 41, and Democrats said again after the vote that they would move on to other legislation next week.]

Reid and Sen. Max Baucus (D-Mont.), in an effort to mollify a handful of conservative Democrats and moderate Republicans, have spent the past several weeks trimming the bill to reduce its deficit impact. But after jettisoning several provisions to help the old, the poor and the jobless, reducing the bill's ten-year deficit impact down from $134 billion to just $33 billion, the bill is still sinking. Not a single Republican is willing to lend support and Nebraska Democrat Ben Nelson is still holding out, leaving Democrats two votes short of the 60 needed to overcome the GOP filibuster.

Extended unemployment benefits lapsed at the beginning of June. By Friday, more than 1.2 million people out of work for longer than six months will have found themselves ineligible for the next tier of extended benefits, which were originally provided by the stimulus bill to fight the recession. Other programs that lapsed include elevated federal aid for state Medicaid programs and a "Doc Fix" that prevents doctors from a 21-percent drop in reimbursement for seeing Medicare patients.

Sen. Debbie Stabenow (D-Mich.) said she believes Republicans are trying to prevent the economy from improving in order to foster an anti-incumbent mood come November.

"Cynically, for them, It doesn't serve them in terms of the elections in the fall if things are beginning to turn around," she said. "If they can stop the recovery from occurring, If they can create as much pain as possible, the cynical view is people will be angry and either drop out and not vote at all or vote against those in the majority."

"Senate Republicans offered a responsible extenders bill," said a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.), referring to the Republican alternative to the bill, which would have reduced the deficit by slashing federal spending. "Democrats rejected it because it did not add to the national debt. Republicans and Democrats agree on the unemployment extensions, but they simply disagree on the Democrats' insistence on adding tens of billions more to an already unsustainable $13 trillion national debt."

HuffPost asked Stabenow if the Democrats' promise that they will drop the "tax extenders" bill altogether might be a bluff to get Republicans to stop demanding cuts.

"Maybe they will come back next week," she said. "Bluff? That suggests a game, and I resent that. There are over a million people right now who have lost their unemployment benefits."

Last week, Democrats and Republicans agreed to reauthorize the Doc Fix provision as a standalone, but House Speaker Nancy Pelosi (D-Calif.) said the House wouldn't consider Doc Fix without the rest of the bill (a fuller version of which the House passed at the end of May). On Thursday, Pelosi changed her tune and said she was more amenable to the solo Doc Fix.

June 23, 2010

After the brilliant Rolling Stone article by Michael Hastings, President Barack Obama has no valid option other than to fire Gen. Stanley McChrystal. Not because of the dozen outrageous anti-administration verbal gaffes which have been reported, but rather because this definitive piece on the “Runaway General” establishes the man in charge of the Afghanistan misadventure as an egotistical flake whose half-baked Afghan war-fighting strategy should never have been endorsed in the first place. It is McChrystal’s policy of counterinsurgency (COIN) that must be fired more than the man who exemplifies its irrationality.

It was the 66-page McChrystal Report that provided Obama with the justification for escalating rather than ending the decade-long Afghanistan war: winning the hearts and minds of people who have no intention of opening either to our tender mercies. They don’t like us or trust us and probably think we smell funny and our food tastes awful. Such profound cultural differences are what make the world an interesting place, but the continuing arrogance of centuries of U.S. imperial policy insists that the rest of the world wants to be just like us.

More important, winning the affection of Afghans and turning their society into a model of Western-style secular democracy have nothing to do with the original purpose of the Afghanistan invasion—to react to the 9/11 attacks. Al-Qaida has moved on to safer havens than the Taliban could provide, most significantly in Pakistan, and “victory” in Afghanistan no longer has a serious U.S. national security purpose. We are embroiled in a civil war—indeed, according to the McChrystal Report, several such wars—and all we are accomplishing is backing one gang of hopelessly corrupt and venal warlords against another.

The Taliban are not necessarily the worst of the lot, and their former allegiance to al-Qaida has been effectively severed. There was nothing in the McChrystal report to indicate that the Taliban and their allies in Afghanistan are now anything but homegrown in their preoccupations, and the appeal of the insurgency is a matter of local grievances. As McChrystal stated in his original report: “Afghans are frustrated and weary after eight years without evidence of the progress they anticipated.”

The Rolling Stone article makes clear that the frustration has only increased with each civilian casualty and poignantly captures McChrystal’s own dilemma of attempting to hold down that death toll without increasing the risks for the troops that he dispatches:

“After nine years of war, the Taliban simply remains too strongly entrenched for the U.S. military to openly attack. The very people that COIN seeks to win over—the Afghan people—do not want us there. Our supposed ally, President [Hamid] Karzai, used his influence to delay the offensive, and the massive influx of aid championed by McChrystal is likely only to make things worse. ‘Throwing money at the problem exacerbates the problem,’ says Andrew Wilder, an expert at Tufts University who has studied the effect of aid in southern Afghanistan. ‘A tsunami of cash fuels corruption, delegitimizes the government and creates an environment where we’re picking winners and losers’—a process that fuels resentment and hostility among the civilian population. So far, counterinsurgency has succeeded only in creating a never-ending demand for the primary product supplied by the military: perpetual war. There is a reason that President Obama studiously avoids using the word ‘victory’ when he talks about Afghanistan. Winning, it would seem, is not really possible. Not even with Stanley McChrystal in charge.”

Hats off to Rolling Stone for doing the tough, on-the-scene reporting that the mass media increasingly avoid. The lionization of McChrystal in much of the reporting which ignored his egregious role in the cover-up of torture in Iraq and his key role in distorting the facts in order to politically exploit the “friendly fire” death of Pat Tillman, a true hero, has been a journalistic low point.

No better was President Obama’s embrace of this man who has now betrayed him. One hopes that Obama now responds to the serious concerns this article raises about his failed policy and not merely to the barbs from the general he once so admired. An indication that he will not do so was provided Tuesday by his press secretary, Robert Gibbs, who relayed that the president will say “it is time for everyone involved to put away their petty disagreements, put aside egos, and get to the job at hand.” If that job is tantamount to anything but quickly getting out of Afghanistan, they might as well keep McChrystal in charge, for he remains a true believer in sinking deeper into the quagmire.

It's not enough to fire General McChrystal for his latest public act of insubordination. It's time to fire the entire Afghanistan strategy. How can Congress possibly appropriate an additional $33 billion to a General who does not believe in the mission, the Commander-in-Chief or the administration officials he so obviously holds in contempt? The answer is obvious: it can't.

There are two possible explanations for this latest McChrystal rip at the Obama administration in the soon-to-be-released issue of Rolling Stone: either he is out of control, cracking under the pressure of a failure with his name all over it, or he has decided he needs to engage in a new round of media manipulation to weaken the hands of the administration figures he disdains and blames for setbacks to his strategy. Either way, the President needs to fire McChrystal now. But he also needs to recognize that this latest debacle is further evidence that it is time to fundamentally change course. If he is unwilling to do so, Congress needs to say "no" to the administration's $33 billion Supplemental Appropriation request when it hits the floor of the House this week or next.

McChrystal's closest advisors speak openly in the article that they do not believe the war in Afghanistan is winnable. Here is how McChrystal's Chief of Operations told Rolling Stone's Michael Hastings that the war in Afghanistan is going to end: "'It's not going to look like a win, smell like a win or taste like a win' said Major General Bill Mayville, 'This is going to end in an argument.'"

As Hastings writes: "So far, counterinsurgency has succeeded only in creating a never-ending demand for the primary product supplied by the military: perpetual war." And that is what key figures in the military have in mind, notwithstanding the president's commitment to begin withdrawing US troops in July of next year. According to a senior military official in Kabul: "There is a possibility that we could ask for another surge of US forces next summer if we see success here."

Another surge? Without a clear exit strategy from Afghanistan - and 96 Members of Congress are demanding one by co-sponsoring legislation sponsored by Jim McGovern in the House - senior military leaders are conducting operations in Afghanistan as if escalation, not withdrawal, could very well be in the cards. And why not? McChrystal backed the administration down before, why not again?

McChrystal began his campaign of public pressure on the Obama administration by leaking his demand for 40,000 additional troops to Bob Woodward of the Washington Post when President Obama was reviewing his war policy. Then there was the public repudiation of Vice President Biden and his preferred strategy at the International Institute for Strategic Studies in London. When asked if he could support a presidential decision to rely on a counterterrorism approach to defeating al Qaeda in Afghanistan, as Vice President Biden advocated, McChrystal replied "The short, glib answer is no."

McChrystal publicly threatened insubordination if the Obama administration did not toe the line and give him exactly what he was demanding. It worked: he not only kept his job, he got everything that he wanted.

Where has McChrystal's strategy led us? What he once described as a "model" operation in Marja, General McChrystal now describes as "a bleeding ulcer." The Pentagon's latest quarterly report to Congress on the war confirms that the insurgency in Afghanistan is expanding its operations and increasing in sophistication. Efforts to strengthen the Afghan National Army have been stymied by "high attrition and low retention" of recruits. Meanwhile, according to the Pentagon report, the insurgency has a steady and growing supply of fighters: "A ready supply of recruits is drawn from a frustrated population where insurgents exploit poverty, tribal friction and a lack of governance to grow their ranks."

McChrystal has become increasingly worried about the consequences of Americans paying attention to the failing war. A Senior Advisor to McChrystal told Rolling Stone, "If Americans pulled back and started paying attention to this war, it would become even less popular."

Exactly.

Congress needs to pay attention. They can start by heeding the advice of Andrew Wilder of Tufts University, who told Hastings that handing over the cash McChrystal wants for his failing operation in Afghanistan will only make things worse: "Throwing money at the problem only exacerbates the problem."

It's time to stop the manipulation, the insubordination and the military dreams of endless war in Afghanistan. Fire McChrystal and then fire the strategy.

Tom Andrews, a former Member of Congress from the first Congressional District of Maine, is the National Director of Win Without War, a coalition of forty-two national membership organizations including the National Council of Churches, the NAACP, the National Organization of Women, the Sierra Club, and MoveOn. He is also co-founder of New Security Action.

June 22, 2010

In Afghanistan, Pakistan and Iraq, the major places of military interest to the United States today (disregarding the hundreds of other places where American soldiers and agents or mercenaries have been dispatched to suppress one or another outbreak of ethnic, tribal, religious or territorial conflict, the United States having appointed itself the enemy of Disorder), there are indications that things are coming apart.

In Afghanistan, Gen. Stanley McChrystal has chosen casual insubordination; the American-sponsored Afghan president talks of making peace with the Taliban enemy and ordering the United States and NATO to leave the country (just when billion-dollar lodes of lithium, gold and the other minerals a modern nation and its leaders covet have been discovered).

There are disputes among Kurds, Turks, Iranians and Iraqis in Iraq, which the U.S. had considered more or less pacified, if still government-free. There is trouble in Somalia, Yemen and the Sahara. You might think the United States was not the most powerful nation on Earth.

In May, U.S. Defense Secretary Robert Gates delivered a number of largely unpublicized talks on defense spending, which has been at flood tide for a number of years now, and not just since the 2001 al-Qaida attacks on New York and Washington—although those events “opened a gusher [to mix the metaphors] in defense spending that nearly doubled the base budget over the last decade.” American arms spending is meant to make Americans safe from its problems, but this is not working.

The secretary said that “the gusher has been turned off, and will stay off for a good period of time.” Congressional attempts to turn off or reduce military spending over the years have consistently failed because military spending is an electorally irresistible cause, even when the results are irrational, or even approach the ludicrous.

Secretary Gates supplied examples of the latter when he spoke to the Navy League annual convention at the beginning of May. He said that nearly all of the Navy’s major weapons programs under development or in production, including the Navy’s two principal projects, the so-called Littoral Combat Ship, together with the multiservice Joint Strike Fighter program (which some European governments unwisely contracted to join), are over budget, behind schedule and loaded with problems.

The ignored problem is why the United States buys these weapons.

It is buying the Littoral Combat Ship for shallow-water and coastal operations to put the Navy into the war against terror (or against pirates, or “violent extremists,” according to your choice of modish nomenclature), where the Navy has been embarrassingly absent, terrorists rarely being seaborne, while pirates often are (but they use inflatable Zodiacs). The vessel is likely to be completed (if the project is actually completed) at that foreseeable point in time when the United States gives up the war on terror out of frustration and failure (see below), and the Navy decides that it is a blue-water Navy after all and doesn’t need such ships.

Gates drew the attention of the Navy League to what the U.S. Navy already possesses:

Eleven large nuclear carrier groups patrolling the seas to confront enemy fleets. No other nation has even one such carrier group, so there are no fleets to confront. France (forever France!) has built one modern nuclear aircraft carrier and is thinking about whether it can afford another. No other navy has more than a few jump jet or helicopter carriers (the U.S. has 10 of these). The United States has 57 nuclear missile-carrying or attack submarines (more than all the rest of the world combined), plus 79 Aegis defensive missile ships carrying 8,000 vertically launched missiles. In all, the U.S. Navy is assessed as being equivalent to the combined next 13 navies in the world.

The Navy’s Marine Corps, with its own air and armored forces, has no foreign counterpart, and itself is larger than most foreign national armies.

Gates could have recited similar figures on the huge disproportion between the American Army and air forces and those of all the rest of the world put together (China and India excepted; both having ground forces twice or more as large as the American regular Army—American mercenary auxiliaries excluded—but those are ground armies not configured to fight the U.S., and their governments are unlikely to wish to do so).

Out of this titanic American power, no peace is being produced. Americans have, during the 65 years since the Second World War, been spending more than the military spending of all the rest of the world combined, with the avowed intention of pacification and global democracy.

It has fought wars or carried out military interventions in Korea, China (via Kuomintang mercenary forces and Tibetan tribesmen), Cuba (via exiles), Laos, Vietnam, Cambodia, Lebanon, Libya, Iraq (twice), Iran, Somalia, Afghanistan (twice), Pakistan (with drones and special forces), Nicaragua (via “Contras”), Grenada, Panama, Dominican Republic, Sudan and Kosovo (with NATO). It has also been involved with coups in Guatemala, Chile, Greece and elsewhere. There probably are more, but this is what I recall.

My list, incomplete or otherwise, is not offered in indignation. Some of this was justified, most not; some has to be seen in the context of the times. The point of the list is a fact that no one seems to understand: Battles were won, but not a single war was won by the United States. There is not one victory (except as noted below), and not one of the interventions had a positive outcome except in Kosovo. The sole clear-cut military victories were in Grenada over a Cuban construction crew, and in Panama, where 500 civilians (the U.N. estimate) were killed in order to seize President Manuel Noriega and put him into a Miami jail cell. He has now served his term.

Visit William Pfaff’s website for more on his latest book, “The Irony of Manifest Destiny: The Tragedy of America’s Foreign Policy,” at www.williampfaff.com.

Strawberries Can Give You Cancer? Poison Gases Being Used to Grow Crops

Mmm, fresh, red, plump, juicy strawberries. You know what tastes really great with them? It’s a secret I learned as a kid. Dip them in sour cream and then dip them in brown sugar. Delish. Or dip them in homemade whipped cream, or chocolate, or both. Or, if they are fresh picked, just eat them plain. But you know what doesn’t taste good with strawberries? Cancer.

Today, the scientists at Pesticide Action Network released a document called Poison Gases in the Field: Pesticides put California families in danger. It’s about tests done with a device called a Drift Catcher that monitors the air for fumigant pesticides. They gave it a try in the California town of Sisquoc to see how well local residents were protected from airborne, carcinogenic pesticides. The answer? Not well.

You see, nature doesn’t think much of commercially grown strawberries. That’s because nature doesn’t like monoculture – vast fields of a single species, year after year. So if you want to overcome nature by growing strawberries as a monoculture, you need some potent toxins to do so. And that begins with soil fumigation, a process that uses a deadly chemical to kill everything in the soil before you plant your strawberries.

The test in this case was with a soil fumigant called chloropicrin. After a soil fumigation in which all of the application rules were followed and no equipment failure occurred, scientists measured levels of chloropicrin in the air. they found that “Average levels over the 19-day period were 23 to 151 times higher than acceptable cancer risks.”

“What’s striking about these results is what they imply about fumigation in general,” says PANNA Staff Scientist Karl Tupper. “Sisquoc is not unique in terms of how close fumigated fields are to people’s homes. The application we monitored was typical as well—there were no blunders and the amount of chloropicrin used was not abnormally high.”

“So if this is happening in Sisquoc, it’s surely happening in other California communities, and it will certainly happen with methyl iodide if it’s registered,” concludes Tupper.

Methyl iodide is another soil fumigant – and a potent carcinogen – that the state of California is currently considering allowing. Aside from cancer, soil fumigants are linked to headaches, vomiting, severe lung irritation, neurological effects, reduced fertility, birth defects and higher rates of miscarriage.

So, if we do away with soil fumigants and we don’t allow the use of methyl iodide, does that mean we can’t grow any strawberries? Hardly. Sustainable farmers work WITH nature instead of trying to overcome it, nurturing soil life instead of killing it. And it’s very possible to grow strawberries sustainably:

“Sustainable farming is all about building healthy soil,” says organic farmer Jim Cochran of Swanton Berry Farm. “I’ve been growing strawberries for 25 years, and fumigant pesticides are the last thing I’d put in my soil.”

Jill Richardson got involved in food policy activism after working for several years in health care and observing the high rate of diet-related chronic illness among the American patient population. She blogs at La Vida Locavore and her first book is Recipe for America: Why Our Food System is Broken and What We Can Do To Fix It

When I was a small boy at the start of the 1950s, my father gave me my first economics lesson. “Bobby,” he said with obvious concern, “you and your children and your children’s children will be repaying the national debt created by Franklin D. Roosevelt.”

I didn’t know what a national debt was, but I remember being scared out of my wits.

Dad was wrong, of course. Even though the national debt then was a much higher percentage of the national economy than it is today, it shrank as the economy boomed. My children have never mentioned FDR’s debt. My granddaughter (almost 2) will never pay a penny of it.

Dad, now 96 and still in good health, recognizes how wrong he was then. He admits FDR’s deficit spending not only won World War II but it also got America out of the Great Depression.

But now another gaggle of deficit hawks is warning us against more federal spending. “The current federal debt explosion is being driven by an inability to stem new spending initiatives,” warns Alan Greenspan in Friday’s Wall Street Journal, calling for budget cuts and saying “the fears of budget contraction inducing a renewed decline of economic activity are misplaced.”

My dad learned from his mistakes. Alan Greenspan obviously didn’t.

Contrary to Greenspan, today’s debt is not being driven by new spending initiatives. It’s being driven by policies that Greenspan himself bears major responsibility for.

Greenspan supported George W. Bush’s gigantic tax cut in 2001 (that went mostly to the rich), and uttered no warnings about W’s subsequent spending frenzy on the military and a Medicare drug benefit (corporate welfare for Big Pharma) — all of which contributed massively to today’s debt. Greenspan also lowered short-term interest rates to zero in 2002 but refused to monitor what Wall Street was doing with all this free money. Years before that, he urged Congress to repeal the Glass-Steagall Act and he opposed oversight of derivative trading. All this contributed to Wall Street’s implosion in 2008 that led to massive bailout, and a huge contraction of the economy that required the stimulus package. These account for most of the rest of today’s debt.

If there’s a single American more responsible for today’s “federal debt explosion” than Alan Greenspan, I don’t know him.

But we can manage the Greenspan Debt if we get the U.S. economy growing again. The only way to do that when consumers can’t and won’t spend and when corporations won’t invest is for the federal government to pick up the slack.

For Greenspan now to say we don’t need more stimulus — when 15 million Americans are still out of work, when retail sales are dropping, when the rate of mortgage delinquencies is still in the stratosphere, when Europe and Japan are tightening their belts — is like Tony Hayward saying the Gulf spill shouldn’t worry us.

America’s long-term debt bomb is a future problem to be sure. But it has nothing to do with current spending initiatives. It will be due mainly to baby boomers’ demands for health care.

Our immediate challenge is to get enough demand back into the economy to pull ourselves out of the deep hole Greenspan helped create. That will require more deficit spending in the short term — relief to state and local governments, extended unemployment benefits, a one-year payroll tax holiday on the first $20K of income.

Following is a Letter to the Editors of the International Herald Tribune June 19-20. It was written by Members of the Academic Staff, Newcastle University, Newcastle Upon Tyne, ENGLAND.

“The response of the American public and its political leaders to the oil Spill in the Gulf of Mexico perfectly illustrates why people in glass houses should notthrow stones.

BP and its corporate associates certainly deserve severe censure for their failure to provide adequate safeguards for their hazardous operations, and their behavior brings to mind the recent reckless folly of the banks. However, the resulting damage is hardly a drop in the ocean compared to the impact of America’s contribution to global atmospheric pollution resulting from the combustion of fossil fuels (see Frank Thomas summary “China/U.S.Roles asLeading C02 Polluters).

At least BP has offered fulsome apologies, is compensating those affected, and is making strenuous efforts to prevent further damage (editor’s note: in contrast to what some experts think). Has the United States accepted responsibility for the impacts of its energy profligacy on climate change? Has it committed itself to providing full restitution for the now well-documented misery which global warming is already inflicting on the world’s poor? Is it making urgent and determined efforts to de-carbonate its economy and lifestyle?

In each case, we think not. It is really in no position to throw stones.”

As world experts are about to meet in Copenhagen on climate change, the vast majority of the climatologist community agrees that global climate change and destructive temperature increases are due to greenhouse gas emissions by humans, This has been clearly shown in Al Gore’s presentations on implications of atmospheric carbon dioxide concentration levels now approaching 400 parts per million …. forecast to more than double by 2050. Scientists state that 350 parts per million is the maximum safe upper limit for atmospheric carbon concentration.

The following illustration of CO2 polluters published by a Dutch paper research staffer, Jorris Verboon, shows how China and US are environmentally culturally enslaved by excessively dangerous carbon dioxide emissions. China, with little oil and gas,depends extensively on its vast supplies of dirty coal – as Canada depends on its dirty oil sands, and as the US produces the highest levels of carbon dioxide per capita.

On a positive note, China is expected to come to the Copenhagen Forum with some strict and advanced measures for fast-track control/diminution of their lethal carbon intensity levels by ambitious investments in alternative energy innovations. China knows this policy must be pursued aggressively despite currently conflicting economic pressures against decarbonizing current rapidly expanding energy demand and job creation met ±40% by coal production – a conflict of fuel policy goals facing most growing economies.

In this regard, experts say China is realistically confronting the challenge already and is, for example, ahead of us in long-distance, high-voltage line transmission of rural wind energy to urban areas where energy use is highest. China is taking Denmark’s and Holland’s advances in wind energy a fast step and big scale further as well as exploiting Germany’s lead role in solar energy applications.

We had better Wake Up Fast in accelerating our own innovative investments in green energy systems and the new jobs they will bring in abundance. This is a new industry knowhow race we lose at our own peril.

Here are the the appalling 2008 leading country figures on environmentally polluting CO2 emissions in millions of tons and emissions per capita.________________________________________________________________ ILLUSTRATION: Highest CO2 Emissions By Selected Countries 2008:

In Millions of Tons & Tons Per Capita________________________________________________________________

Country

Millions of Tons

Total Emissions

Tonsof

Emissions per Capita

1. China

6,810(=6.8 Billion Tons)

5.1

2. United States

6,370

20.4

3. Russia

1,688

12.1

4. India

1,409

1.2

5. Japan

1,392

11.0

6. Germany

857

10.4

7. South Korea

664

13.7

8. Canada

664

19.6

9. UK

582

9.4

10.Iran

532

6.9

12.Italy

483

8.0

16.France

428

7.0

18.Spain

380

8.1

24. Netherlands

263 (=263Million Tons)

15.9

Obviously,if China and India achieved just half of current US CO2 emissions per capita, or 10 tons per capita, over the next 40 years, by 2050 these two countries would be adding a total of ±26 billion tons of carbon dioxide into the atmosphere (vs. 8.2billiontons in 2008) based on their combined populationtoday of 2.6billion people!

The ±26 billiontons would far exceed ±33 billion tons when including US emissions in 2008. This is enough for China/India/US alone to bring the CO2 level to over 800 parts per million by 2050 …. with inevitable heating-up of the earth to humanly intolerable and deadly levels, exacerbated by a world population expansion from 6.5 billion to over 9 billion by 2050.

The Copenhagen Conference is a historical chance for nations to come together on this real threat …. a greenhouse gas emission menace that will, in a relatively short time, clearly endanger staying-alive perspectives for our children and our children’s children by 2050, and thereafter.

The survival risks for Planet Earth are simply too great to take any chances on not taking the right steps now to protect future generations against an intensifying, calamitous CO2 emission development.This is a crucial curtain call to unite around a common goal to change ourglobal fossil fuel lifestyle dependencies FAST!

June 20, 2010

The festering corporate government in Washington, DC, is a theater of the absurd. Some of the acts of this tragedy follow:

1. Start with the often hapless Center for Medicare and Medicaid Services (CMS), the agency that administers Medicare. Medicare pays $1,593 per injection of Lucentis for wet age-related macular degeneration as well as $42 per dose for Avastin, a drug that has a similar molecular structure, used by ophthalmologists.

Both drugs are made by Genentech. Lucentis is FDA approved for the vision problem and the other, Avastin, is approved to treat cancer. Doctors can also use Avastin for vision treatment. A study by three officials of CMS and Dr. Philip Rosenfeld, a retina specialist at the University of Miami, reported that for Medicare patients 60% of eye injections were Avastin, while 40% used Lucentis. Note this: Medicare paid $537 million for Lucentis in 2008 and only $20 million for Avastin!

2. Saving about half a billion a year by using Avastin is small potatoes to another CMS shortcoming. For fiscal year 2009, CMS paid $65 billion in erroneous payments-to deceased doctors, fraudsters, delinquent or imprisoned contractors and other suspended or debarred firms.

Organized fraud of Medicare is becoming more systemic. So President Obama wants CMS to use a new fraud-detection program. Professor Malcolm Sparrow of Harvard University, the nation's leading expert on health care billing fraud told them how to do this many years ago, but they were not listening.

The President wants to reduce throughout the government "payments in benefits, contracts, grants and loans to ineligible people or organizations," according to the Washington Post. Better trillions of dollars late over the decades, then never!

3. Five oil company executives, including from BP, admitted at a Congressional hearing this week that they did not have contingency plans worked out for catastrophic failures. What is, by comparison, the worst case scenario for offshore windfarms or solar/thermal conservation, or passive solar architecture? Energy Secretary Stephen Chu still does not note such a criteria to differentiate between energy supply priorities.

4. President Obama now, belatedly, recognizes that the notorious oil industry patsy, the Minerals Management Service (MMS) in the Department of Interior, was a washout non-regulator of offshore drilling inherited from the Bush and Clinton Administrations. Well he also better take a hard look at the Federal Railroad Administration (FRA), the Office of Pipeline Safety (OPS) and the Nuclear Regulatory Commission (NRC), which are variously pleased with being captured by the very industries they are supposed to regulate. Too many agencies, in essence, allow the companies to "self-regulate" - an oxymoron.

Each of these agencies may wake up some day to witness a catastrophic hazardous materials disaster or meltdown that they should have prevented with stronger standards, inspection and law enforcement. Heed this caution, Mr. President!

5. Another $50 billion request by the White House just whisked through Congress for the brutal, spreading, futile war in Afghanistan-the historic graveyard of empires. Republicans loved to vote for this raid on the taxpayers.

But this week, a united Republican cabal, joined by Senators Joseph Lieberman (D-CT) and Ben Nelson (D-NE), blocked a $120 billion package (the threat of filibuster again) to extend unemployment benefits, preserve Medicare payments, extend tax credits for corporate research, raise taxes on oil companies, other big companies and investment partnerships. The bill also includes $24 billion to aid state governments in preventing thousands of state layoffs, including teachers.

The point here is not arbitrarily to decry Republican questioning of this domestic bill. It is to show how an overall ignorant, rubberstamping Congress is not heeding the lessons from Vietnam and Iraq - the immense casualties, the destruction and poisoning of these countries by detonations, and laying waste to the environment, and the imperialist policies that also harmed our country in so many tangible and intangible ways.

6. Dana Milbank, the Washington Post reporter-satirist, was at the House of Representatives' hearing this week where Congressman Joe Barton (R-TX) apologized to BP's CEO, Tony Hayward, saying the White House's demand that BP set aside $20 billion for its huge toxic contamination to the Gulf coast and its people was "a shakedown." He added, for good supplicant measure, that he doesn't "want to live in a country" that treats a private corporation this way. He later apologized for his apology, at the behest of Republican House leaders.

The Barton outburst illustrates why it should be easy for the Democratic Party to landslide the Republicans in the 2010 Congressional elections. Probably the most craven version of the Republican Party ever, this team takes huge slurries of corporate money while blocking any safeguards for workers, consumers, small taxpayers, and the environment. They even defeated investor rights for shareholders, who own these companies, but whose bosses pay themselves obscenely to control them.

The Democrats have their hand out to the same commercial interests. But if they want to win, they'd better formulate the language of standing with the people over big business by November. And, if the Democrats don't want November to mark their curtain call, their language of standing with the people needs to be followed by action.

During an appearance at Japan Institute for International Affairs, Karzai focused on his country's mineral deposits. He pointed to Japan's status as Afghanistan's second-biggest donor, and reasoned that Japan should enjoy special access to Afghan resources with estimated values that range from $1-3 trillion dollars.

"Morally, Afghanistan should give access as a priority to those countries that have helped Afghanistan massively in the past few years," Karzai told the institute.

"What . . . we have to reciprocate with is this opportunity of mineral resources, that we must return at the goodwill of the Japanese people by giving Japan priority to come and explore and extract," Karzai said.

Looking to the future, Karzai echoed an internal Pentagon memo and said that the mining will define Afghanistan, "Whereas Saudi Arabia is the oil capital of the world, Afghanistan will be the lithium capital of the world.... And Japan is welcome to participate in the lithium exploration in Afghanistan."

"Countries with a history of conflict have perverse effects from mineral wealth -- more war, more corruption, less democracy and more inequality," said Terry Lynn Karl, a political science professor at Stanford and the author of "The Paradox of Plenty," which shows how the populations of poor countries like Nigeria often get poorer after oil is discovered and a tiny elite benefits.

American military deaths in Afghanistan total 1,103. Last month, the total cost of wars in Afghanistan and Iraq surpassed $1 trillion, according to National Priorities Project's Cost of War.

So, morally speaking Japan has helped Afghanistan more than the US by extending a helping hand rather than fighting a war! Oh, the ingratitude! Karzai actually had the nerve to say:

"Morally, Afghanistan should give access as a priority to those countries that have helped Afghanistan massively in the past few years," Karzai told the institute.

Give me a break. The US has sacrificed over a thousand American lives but, morally, Japan has helped Afghanistan and the US has not! The wages of sin is death, and the wages of developmental help is access to a country's mineral wealth. LET THAT BE A LESSON TO US, AMERICANS! We should not waste another dollar there or another American life.

Odds are most supermarket strawberries come from California — that's where 90 percent of the berries are produced. And if the strawberries are not organic, they were likely grown in fumigated soil, which is creating a stir between scientists and regulators in California. The two groups recently faced off over the expected approval of a potentially dangerous pesticide.

Currently, farmers use a fumigant called methyl bromide. But it is being phased out internationally because it damages the ozone layer. And the leading alternative — methyl iodide — has its own set of problems.

"This is very likely — because of its chemical structure — to be highly toxic," says John Froines, a chemist and professor of environmental health sciences at UCLA. "It is very worrisome, even frightening, to a chemist. And therefore it should be to the public as well."

Frightening because animal studies show that methyl iodide is a carcinogen and a neurotoxin, and it can cause miscarriages.

Safe Exposure Levels

So the task, in evaluating how toxic methyl iodide is, is to extrapolate this data, from rabbits to humans, and arrive at an exposure level that might be considered safe.

When the Environmental Protection Agency approved methyl iodide as a pesticide under the Bush administration in 2007, it was a controversial decision at the time. But California — which is the country's biggest user of the chemical — has its own review process.

Methyl Iodide Exposure

Credit: Lauren Sommer, KQED; Adrienne Wollman, NPR

In April, the state issued a notice to approve methyl iodide with an exposure limit of 96 parts per billion for workers.

Web Resources

"The number in the notice is 120 times higher than the level that both the independent scientific review panel thought was safe, as well as their own internal experts thought would be safe, in terms of worker exposure," Loechler says.

According to an assessment produced by the panel and staff scientists, the safe exposure level for workers is 0.8 parts per billion. Anything over that, they said, would be unsafe.

"I honestly think that this chemical will cause disease and illness," says Froines, who chaired the panel. "And so does everyone else on the committee."

Can't 'Change The Science'

In setting new exposure levels for methyl iodide, panel members say the state has overstepped its role with little explanation for why.

"They can say anything they want from a policy point of view, but what they cannot do is simply, arbitrarily, change the science," says panel member Paul Blanc, a professor of medicine at University of California, San Francisco.

An e-mail obtained through California's Public Records Act shows that staff scientists were also perplexed by how exposure levels had jumped from the recommended 0.8 parts per billion to 96 parts per billion. They stand by the lower numbers.

Managers at the agency say it's not up to scientists to decide whether methyl iodide is approved and at what levels.

At a coastal test field in Watsonville, Calif., strawberry growers experiment with different growing methods. Researcher Doug Shaw says that fumigated strawberry plots produce twice as many strawberries as nonfumigated plots.

"We went through a very careful review process of all the scientific information before us," says Mary-Ann Warmerdam, director of California's Department of Pesticide Regulation.

She says methyl iodide can be used safely and points to the EPA's exposure limit for workers, which is 193 parts per billion – twice what California is proposing.

Warmerdam also points to a list of regulations intended to protect people from inhaling or coming into contact with the chemical. Things like face masks, gloves, heavy tarps and buffer zones.

"The mitigation factors that we've put forward are extraordinarily health protective, and they stand up against the health protective levels put forward by others, including EPA," she says.

Meanwhile, the EPA, under President Obama, appears to be reconsidering the previous administration's approval of methyl iodide. According to state transcripts, EPA officials say they may take another look at the chemical, depending on what happens in California.

June 19, 2010

Paul Krugman Vs. Alan Greenspan On Deficits

by Ryan McCarthy

We don't know for sure that New York Times columnist Paul Krugman and former Federal Reserve chief Alan Greenspan had each other in mind when they penned diametrically opposed op-eds, both of which ran today. But, we can hope.

Nobel Prize-winning economist Paul Krugman and former Fed chief Alan Greenspan took very different approaches to the balooning Federal deficit in op-eds today.

The key issue for both Krugman and Greenspan, of course, is deficits and spending. For Krugman, the world's recent turn toward austerity, evinced by Congress's recent refusal to extend unemployment benefits and cutbacks in social services across Europe, is a sign that governments are afraid to spend enough to stimulate economic growth. "Suddenly, creating jobs is out, inflicting pain is in," he writes.

Greenspan, for his part, is more concerned with looming pain than current economic hardships. Noting that in the last 18 months, the U.S. deficit has ballooned to 8.6 trillion from $5.5 trillion, Greenspan argues that the world needs "tectonic shift in fiscal policy." And, growth, he posits can't and won't come from government spending. (Though, to be fair, other than budget cuts, Greenspan offers no alternative to government spending to boost the economy.) Here's Greenspan:

"We cannot grow out of these fiscal pressures. The modest-sized post-baby-boom labor force, if history is any guide, will not be able to consistently increase output per hour by more than 3% annually. The product of a slowly growing labor force and limited productivity growth will not provide the real resources necessary to meet existing commitments. (We must avoid persistent borrowing from abroad. We cannot count on foreigners to finance our current account deficit indefinitely.)"

Krugman -- nor any major economist following the crisis -- has ever argued that we can continue to borrow cheaply from foreign countries indefinitely. The larger problem, he suggests, is that here in the states politicians are deeply inconsistent about which benefits get cut in the continuing push to trim Federal spending. Here's Krugman.

"In America, many self-described deficit hawks are hypocrites, pure and simple: They're eager to slash benefits for those in need, but their concerns about red ink vanish when it comes to tax breaks for the wealthy. Thus, Senator Ben Nelson, who sanctimoniously declared that we can't afford $77 billion in aid to the unemployed, was instrumental in passing the first Bush tax cut, which cost a cool $1.3 trillion. "

The right has been pushed to new extremes in their efforts to find fault with Obama over everything. They are looking even more ridiculous in light of the excruciating facts that BP is more and more obviously to blame for the worst environmental catastrophe in human history. Their dilemma is how not to blame BP for it but to blame Obama instead. Their quest is looking more and more completely ridiculous. They expect a certain segment of the public to accept their bald faced lies, but the lie that Obama is to blame is just about too bald faced for anyone including right wing extremists to accept. It's getting to the point that, even if you're a diehard right winger, you're not going to be able to accept that black is white and that white is black. The "give Obama no credit" crowd is up against the wall of reality, a reality that the biggest fool on earth has to accept although they're trying hard not to. So the Rush Limbaughs and Michele Bachmans of the world are looking more and more ridiculous. It's becoming more apparent that their diatribes resemble the Emperor's new clothes. Their insistence that the emperor is wearing a fine suit, when he is transparently naked, is something that even their most ardent admirers can no longer accept.

On the other hand Obama is looking better and better in the way he's responding to this crisis. His successful bid to get BP to put $20 billion into an escrow account foregoing the legal limit of $75 million is really something of a coup. Of course, the right tried to put the worst spin possible on it including Barton's "shakedown" remark. But the public - especially those on the Gulf - will be hard pressed to disapprove of Obama's obtaining for them what amounts to real money and setting things up so that they will have access to it in an expeditious and fair manner. Their attempts to get the public to side with BP in this matter and against Obama are looking more and more ridiculous especially when you have an intelligent, caring person doing his best to do right by his citizens on the one hand and on the other side a reckless and negligent corporation that can't seem to get it's spokesmen to speak without putting their feet in their mouths. By the way I think Tony Hayward is probably eternally grateful that he has been relieved of his duty. His job as the public face of BP in America was one even Dante wouldn't have assigned to his worst enemy. He is probably breathing a huge sigh of relief.

At the same time that the right is up to its daily dose of disapproving of every move Obama makes regardless of which way he moves, the left is criticizing him for not going far enough in the direction they would like to see him proceed in. Why, they are asking, does he not demand that the American people join him in the fierce urgency of solarizing America in the same spirit as John F Kennedy demanded that we put a man on the moon? Why doesn't he move with the lightning speed of FDR when he established the Civilian Conservation Corps? Why does he not demand that we will not use any more foreign oil than we did in 1977 as Jimmy Carter did? The answer is that politics is the art of the possible and we are living in much different times than FDR or John F Kennedy or Jimmy Carter lived in. They didn't have the gnats of the right like Glen Beck, Rush Limbaugh and Sean Kennedy nipping at every inch of exposed flesh. They didn't have a wishy washy electorate who is with you one minute and against you the next. They didn't have 30 years of a relentless assault on government as capable of organizing and doing great things such as a trip to the moon.

Today the ascendancy of the right and the absolute refusal of the Senate to pass any legislation that might be seen as a political victory for Obama in any way regardless of how much good it might do for the American people is creating a context in which Obama has to tread very cautiously and gingerfootedly indeed. Yet despite that, he has accomplished some great and historical things already like the health care bill and bringing the nation back from the brink of another Great Depression. And please don't forget that Obama is not all powerful. It's up to Congress to do things too over which he has virtually no power. This is especially true when it comes to the Republican use of the filibuster to stall, delay and defeat every initiative undertaken by Democrats. Despite being President, Obama is not all powerful. He can only do so much. If he tried to act in the manner of FDR or Jimmy Carter, or John Kennedy or even Lyndon Johnson, he would end up getting absolutely nowhere and be totally frustrated. That would be the outcome that the Limbaughs of the world would most like to see. I seem to recall that Carter's Presidency did not go all that well in the end probably due to circumstances beyond his control.

So don't expect superhuman things from Obama. He's doing infinitely better than George W Bush just by being an intelligent, committed, articulate and caring human being who is trying his best to use his position to benefit the American people, and, despite great odds, he's had a certain measure of success although not many are willing to give him an iota of credit for that.

Joe Barton and the Big Big Debate

Representative Joe Barton’s apology to Tony Hayward for what he termed a “shakedown” of BP by the White House in order to get BP’s agreement to a $20 billion escrow fund, was the best thing to happen to BP since April 20, and the best boost for the White House in months. What possessed Barton, the ranking Republican on Energy and Commerce?

Adding to the mystery is the fact that just four years ago, Barton, as the committee’s chair, excoriated BP’s top brass (who were then appearing before the Committee to explain the firm’s negligence in allowing 270,000 gallons of oil to spill on Alaska’s North Slope, the worst spill ever recorded in that fragile territory) for a “corporate culture of seeming indifference to safety and environmental issues … And this comes from a company that prides itself in their ads on protecting the environment. Shame, shame, shame.”

How did Barton go from BP as shameful villain to BP as shakedown victim? And how did he fail to sense the dimensions of the public’s outrage at BP this time around?

Is it because Barton is virtually owned by Texas oil money? This can’t explain Barton’s turnaround because he was owned by oil four years ago, too.

Is it old-fashioned partisan politics? Four years ago Republicans were in charge of Congress and the White House, and now Democrats are. But this can’t be the reason either because Barton’s bizarre apology to BP yesterday so embarrassed congressional Republicans they pushed him into retracting it hours later.

Stupidity? Barton was smart enough four years ago to deliver one of the most scathing criticisms of BP by any member of Congress. His “shame, shame, shame” line was repeated on the evening news and in the following day’s headlines.

I think something else is going on. Barton’s view that the White House overreached in forcing BP to put aside $20 billion has been voiced elsewhere in the netherworld of the Republican right, on Fox News, and among Tea Partiers.

Unlike four years ago, this country is now having the sharpest and most emotional debate it’s had in more than a century over a deceptively simple question: Which do you trust less – Big Business (including Wall Street) or Big Government?

The crash of Wall Street and subsequent Great Recession has impassioned both sides. The Street can’t be trusted because its recklessness almost wrecked the economy; big business can’t be trusted because it’s laid off millions of Americans with scant regard for their welfare.

On the other hand, government is on the loose because of the giant stimulus package; the yawning budget deficit and hair-raising national debt; the “takeovers” of General Motors, Chrysler, and AIG, along with the firings of several executives; and the huge health-care bill.

Until six months ago, the latter narrative, emanating from the Republican right, seemed to be winning the hearts and minds of an ever more angry electorate. Democrats (including the incumbent of the Oval Office) were reluctant to criticize Wall Street and Big Business with nearly the force and consistency of the Republican offensive against Big Government.

But then came the tidal wave of revelations about the rapacity of business. Investigators linked the near-meltdown of the Street to questionable accounting practices at several of the big banks. Goldman Sachs was shown to have been double-dealing with investors for its own profits.

Heath insurers, most notably WellPoint, yanked up their rates — thereby showing themselves to be less interested in the health care of Americans than their own bottom lines. A terrible mine explosion revealed the recklessness and indifference of one of America’s biggest mining companies, Massey Energy.

And now the worst environmental disaster in American history, courtesy of BP.

In light of all this, the “I trust Big Business (and Wall Street) more than I trust Big Government” story line seems bizarre to most Americans – as did Joe Barton’s apology to BP yesterday.

The political question of the moment is whether the Barton moment finally convinces the President and Democratic leaders it’s safe to fully embrace the other story line. The problem for many of them, of course, is that a large percent of their campaign money is coming from big business and Wall Street.

But fundamentally, the debate is absurd.

It’s not the purpose of the private sector to protect the public. Companies like Goldman Sachs, Massey Energy, WellPoint, and BP will do everything they can to make money. They owe allegiance to their shareholders. Hopefully along the way they also make great products and provide terrific services. If the market is competitive, both consumers and investors gain.

The purpose of government is to protect and enhance the well-being of Americans. Its job is to protect the public from corporate excesses — enacting laws that bar certain actions that may hurt or endanger the public, and fully enforcing those laws.

We get into trouble when the two sets of responsibilities are confused – when big business and Wall Street spend vast amounts of money trying to influence government, and when government officials (including the officials of regulatory agencies) pull their punches because they’re aiming for lucrative jobs in the private sector.

The real challenge of our time has nothing to do with whether one trusts Big Business and Wall Street more or less than Big Government. The challenge is to keep the two apart, each focused on what they’re supposed to be doing. (That’s why, for example, I still think it unwise to have BP run the operation to plug the hole in the bottom of the Gulf.)

PORT IN A DEBT STORM Linda Robertson, right, hugs her aunt Helen Day. Ms. Robertson moved in with her in Kansas City, Mo., after she and her son could no longer afford his apartment. Ms. Robertson paid nearly $4,000 into a debt settlement account, but filed for bankruptcy after a credit card company sued her.

PALM BEACH, Fla. — For the companies that promise relief to Americans confronting swelling credit card balances, these are days of lucrative opportunity.

So lucrative, that an industry trade association, the United States Organizations for Bankruptcy Alternatives, recently convened here, in the oceanfront confines of the Four Seasons Resort, to forge deals and plot strategy.

At a well-lubricated evening reception, a steel drum band played Bob Marley songs as hostesses in skimpy dresses draped leis around the necks of arriving entrepreneurs, some with deep tans.

The debt settlement industry can afford some extravagance. The long recession has delivered an abundance of customers — debt-saturated Americans, suffering lost jobs and income, sliding toward bankruptcy. The settlement companies typically harvest fees reaching 15 to 20 percent of the credit card balances carried by their customers, and they tend to collect upfront, regardless of whether a customer’s debt is actually reduced.

State attorneys general from New York to California and consumer watchdogs like the Better Business Bureau say the industry’s proceeds come at the direct expense of financially troubled Americans who are being fleeced of their last dollars with dubious promises.

Consumers rarely emerge from debt settlement programs with their credit card balances eliminated, these critics say, and many wind up worse off, with severely damaged credit, ceaseless threats from collection agents and lawsuits from creditors.

In the Kansas City area, Linda Robertson, 58, rues the day she bought the pitch from a debt settlement company advertising on the radio, promising to spare her from bankruptcy and eliminate her debts. She wound up sending nearly $4,000 into a special account established under the company’s guidance before a credit card company sued her, prompting her to drop out of the program.

By then, her account had only $1,470 remaining: The debt settlement company had collected the rest in fees. She is now filing for bankruptcy.

“They take advantage of vulnerable people,” she said. “When you’re desperate and you’re trying to get out of debt, they take advantage of you.” Debt settlement has swollen to some 2,000 firms, from a niche of perhaps a dozen companies a decade ago, according to trade associations and the Federal Trade Commission, which is completing new rules aimed at curbing abuses within the industry.

Last year, within the industry’s two leading trade associations — the United States Organizations for Bankruptcy Alternatives and the Association of Settlement Companies — some 250 companies collectively had more than 425,000 customers, who had enrolled roughly $11.7 billion in credit card balances in their programs.

As the industry has grown, so have allegations of unfair practices. Since 2004, at least 21 states have brought at least 128 enforcement actions against debt relief companies, according to the National Association of Attorneys General. Consumer complaints received by states more than doubled between 2007 and 2009, according to comments filed with the Federal Trade Commission.

“The industry’s not legitimate,” said Norman Googel, assistant attorney general in West Virginia, which has prosecuted debt settlement companies. “They’re targeting a group of people who are already drowning in debt. We’re talking about middle-class and lower middle-class people who had incomes, but they were using credit cards to survive.”

The industry counters that a few rogue operators have unfairly tarnished the reputations of well-intentioned debt settlement companies that provide a crucial service: liberating Americans from impossible credit card burdens.

With the unemployment rate near double digits and 6.7 million people out of work for six months or longer, many have relied on credit cards. By the middle of last year, 6.5 percent of all accounts were at least 30 days past due, up from less than 4 percent in 2005, according to Moody’sEconomy.com.

Yet a 2005 alteration spurred by the financial industry made it harder for Americans to discharge credit card debts through bankruptcy, generating demand for alternatives like debt settlement.

The Arrangement

The industry casts itself as a victim of a smear campaign orchestrated by the giant banks that dominate the credit card trade and aim to hang on to the spoils: interest rates of 20 percent or more and exorbitant late fees.

“We’re the little guys in this,” said John Ansbach, the chief lobbyist for the United States Organizations for Bankruptcy Alternatives, better known as Usoba (pronounced you-SO-buh). “We exist to advocate for consumers. Two and a half billion dollars of unsecured debt has been settled by this industry, so how can you take the position that it has no value?”

But consumer watchdogs and state authorities argue that debt settlement companies generally fail to deliver.

In the typical arrangement, the companies direct consumers to set up special accounts and stock them with monthly deposits while skipping their credit card payments. Once balances reach sufficient size, negotiators strike lump-sum settlements with credit card companies that can cut debts in half. The programs generally last two to three years.

“What they don’t tell their customers is when you stop sending the money, creditors get angry,” said Andrew G. Pizor, a staff lawyer at the National Consumer Law Center. “Collection agents call. Sometimes they sue. People think they’re settling their problems and getting some relief, and lo and behold they get slammed with a lawsuit.”

In the case of two debt settlement companies sued last year by New York State, the attorney general alleged that no more than 1 percent of customers gained the services promised by marketers. A Colorado investigation came to a similar conclusion.

The industry’s own figures show that clients typically fail to secure relief. In a survey of its members, the Association of Settlement Companies found that three years after enrolling, only 34 percent of customers had either completed programs or were still saving for settlements.

“The industry is designed almost as a Ponzi scheme,” said Scott Johnson, chief executive of US Debt Resolve, a debt settlement company based in Dallas, which he portrays as a rare island of integrity in a sea of shady competitors. “Consumers come into these programs and pay thousands of dollars and then nothing happens. What they constantly have to have is more consumers coming into the program to come up with the money for more marketing.”

The Pitch

Linda Robertson knew nothing about the industry she was about to encounter when she picked up the phone at her Missouri home in February 2009 in response to a radio ad.

What she knew was that she could no longer manage even the monthly payments on her roughly $23,000 in credit card debt.

So much had come apart so quickly.

Before the recession, Ms. Robertson had been living in Phoenix, earning as much as $8,000 a month as a real estate appraiser. In 2005, she paid $185,000 for a three-bedroom house with a swimming pool and a yard dotted with hibiscus.

When the real estate business collapsed, she gave up her house to foreclosure and moved in with her son. She got a job as a waitress, earning enough to hang on to her car. She tapped credit cards to pay for gasoline and groceries.

By late 2007, she and her son could no longer afford his apartment. She moved home to Kansas City, where an aunt offered a room. She took a job on the night shift at a factory that makes plastic lids for packaged potato chips, earning $11.15 an hour.

Still, her credit card balances swelled.

The radio ad offered the services of a company based in Dallas with a soothing name: Financial Freedom of America. It cast itself as an antidote to the breakdown of middle-class life.

“We negotiate the past while you navigate the future,” read a caption on its Web site, next to a photo of a young woman nose-kissing an adorable boy. “The American Dream. It was never about bailouts or foreclosures. It was always about American values like hard work, ingenuity and looking out for your neighbor.”

When Ms. Robertson called, a customer service representative laid out a plan. Every month, Ms. Robertson would send $427.93 into a new account. Three years later, she would be debt-free. The representative told her the company would take $100 a month as an administrative fee, she recalled. His tone was take-charge.

“You talk about a rush-through,” Ms. Robertson said. “I didn’t even get to read the contract. It was all done. I had to sign it on the computer while he was on the phone. Then he called me back in 10 minutes to say it was done. He made me feel like this was the answer to my problems and I wasn’t going to have to face bankruptcy.”

Ms. Robertson made nine payments, according to Financial Freedom. Late last year, a sheriff’s deputy arrived at her door with court papers: One of her creditors, Capital One, had filed suit to collect roughly $5,000.

Panicked, she called Financial Freedom to seek guidance. “They said, ‘Oh, we don’t have any control over that, and you don’t have enough money in your account for us to settle with them,’ ” she recalled.

Her account held only $1,470, the representative explained, though she had by then deposited more than $3,700. Financial Freedom had taken the rest for its administrative fees, the company confirmed.

Financial Freedom later negotiated for her to make $100 monthly payments toward satisfying her debt to the creditor, but Ms. Robertson rejected that arrangement, no longer trusting the company. She demanded her money back.

She also filed a report with the Better Business Bureau in Dallas, adding to a stack of more than 100 consumer complaints lodged against the company. The bureau gives the company a failing grade of F.

Ms. Robertson received $1,470 back through the closure of her account, and then $1,120 — half the fees that Financial Freedom collected. Her pending bankruptcy has cost her $1,500 in legal fees.

“I trusted them,” she said. “They sounded like they were going to help me out. It’s a rip-off.”

“We talked to her multiple times and verified the full details,” he said, adding that his company puts every client through a verification process to validate that they understand the risks — from lawsuits to garnished wages.

Intense and brooding, Mr. Butcher speaks of a personal mission to extricate consumers from credit card debt. But roughly half his customers fail to complete the program, he complained, with most of the cancellations coming within the first six months. He pinned the low completion rate on the same lack of discipline that has fostered many American ailments, from obesity to the foreclosure crisis.

“It comes from a lack of commitment,” Mr. Butcher said. “It’s like going and hiring a personal trainer at a health club. Some people act like they have lost the weight already, when actually they have to go to the gym three days a week, use the treadmill, cut back on their eating. They have to stick with it. At some point, the client has to take responsibility for their circumstance.”

Consumer watchdogs point to another reason customers wind up confused and upset: bogus marketing promises.

In April, the United States Government Accountability Office released a report drawing on undercover agents who posed as prospective customers at 20 debt settlement companies. According to the report, 17 of the 20 firms advised clients to stop paying their credit card bills. Some companies marketed their programs as if they had the imprimatur of the federal government, with one advertising itself as a “national debt relief stimulus plan.” Several claimed that 85 to 100 percent of their customers completed their programs.

“The vast majority of companies provided fraudulent and deceptive information,” said Gregory D. Kutz, managing director of forensic audits and special investigations at the G.A.O. in testimony before the Senate Commerce Committee during an April hearing.

At the same hearing, Senator Claire McCaskill, a Missouri Democrat, pressed Mr. Ansbach, the Usoba lobbyist, to explain why his organization refused to disclose its membership.

“The leadership in our trade group candidly was concerned that publishing a list of members ended up being a subpoena list,” Mr. Ansbach said.

“Probably a genuine concern,” Senator McCaskill replied.

The Coming Crackdown

On multiple fronts, state and federal authorities are now taking aim at the industry.

The Federal Trade Commission has proposed banning upfront fees, bringing vociferous lobbying from industry groups. The commission is expected to issue new rules this summer. Senator McCaskill has joined with fellow Democrat Charles E. Schumer of New York to sponsor a bill that would cap fees charged by debt settlement companies at 5 percent of the savings recouped by their customers. Legislation in several states, including New York, California and Illinois, would also cap fees. A new consumer protection agency created as part of the financial regulatory reform bill in Congress could further constrain the industry.

The prospect of regulation hung palpably over the trade show at this Atlantic-side resort, tempering the orchid-adorned buffet tables and poolside cocktails with a note of foreboding.

“The current debt settlement business model is going to die,” declared Jeffrey S. Tenenbaum, a lawyer in the Washington firm Venable, addressing a packed ballroom. “The only question is who the executioner is going to be.”

That warning did not dislodge the spirit of expansion. Exhibitors paid as much as $4,500 for display space to showcase their wares — software to manage accounts, marketing expertise, call centers — to attendees who came for two days of strategy sessions and networking.

Cody Krebs, a senior account executive from Southern California, manned a booth for LowerMyBills.com, whose Internet ads link customers to debt settlement companies. Like many who have entered the industry, he previously sold subprime mortgages. When that business collapsed, he found refuge selling new products to the same set of customers — people with poor credit.

“It’s been tremendous,” he said. “Business has tripled in the last year and a half.”

The threat of regulations makes securing new customers imperative now, before new rules can take effect, said Matthew G. Hearn, whose firm, Mstars of Minneapolis, trains debt settlement sales staffs. “Do what you have to do to get the deals on the board,” he said, pacing excitedly in front of a podium.

And if some debt settlement companies have gained an unsavory reputation, he added, make that a marketing opportunity.

June 17, 2010

Gosh, how quickly things turn. One day, you're a strutting peacock — the next day, you're just another gasping, oil-covered bird.

In early April, BP was strutting about in full corporate splendor, showing off the $9 billion in profits that it had soaked up in just the first three months of this year. It was also basking in a corporate re-imaging campaign, depicting itself as a clean-energy pioneer and declaring that BP now stood for "Beyond Petroleum."

Since its Gulf of Mexico well blew out on April 20, however, BP has proven to be beyond belief. The wider and deeper that this catastrophe spreads, the more we discover just how oily this giant is.

From the time it was known as the Anglo-Persian Oil Company and set out to grab and control the rich petroleum reserves owned by what is now Iran, BP has been a recidivist global criminal. In the past three decades, it grew huge by swallowing such competitors as Standard Oil of Ohio, Amoco and Arco. Along the way, it has been implicated in bribery, overthrowing governments, plunder and money laundering, plus having established one of the worst safety and environmental records in an industry that is notoriously reckless on both counts.

And now, its rap sheet grows almost daily. In fact, the Center for Public Integrity has revealed that the oil giant's current catastrophic mess should come as no surprise, for it has a long and sorry record of causing calamities. In the last three years, the center says, an astonishing "97 percent of all flagrant violations found in the refining industry by government safety inspectors" came at BP facilities. These included 760 violations rated as "egregious" and "willful." In contrast, the oil company with the second-worst record had only eight such citations.

While its CEO, Tony Hayward, claims that its gulf blowout was simply a tragic accident that no one could've foreseen, internal corporate documents reveal that BP itself had been struggling for nearly a year with its inability to get this well under control.

Also, it had been willfully violating its own safety policies and had flat out lied to regulators about its ability to cope with what's delicately called a major "petroleum release" in the Gulf of Mexico.

"What the hell did we do to deserve this?" Hayward asked shortly after his faulty well exploded. Excuse us, Tony, but you're not the victim here — and this disaster is not the work of fate. Rather, the deadly gusher in the gulf is a direct product of BP's reckless pursuit of profits. You waltzed around environmental protections, deliberately avoided installing relatively cheap safety equipment, and cavalierly lied about the likelihood of disaster and your ability to cope with it.

"It wasn't our accident," the CEO later declared, as oil was spreading. Wow, Tony, in one four-word sentence, you told two lies. First, BP owns the well, and it is your mess. Second, the mess was not an "accident," but the inevitable result of hubris and greed flowing straight from BP's executive suite.

"The Gulf of Mexico is a very big ocean," Hayward told the media, trying to sidestep the fact that BP's mess was fast becoming America's worst oil calamity. Indeed, Tony coolly explained that the amount of oil spewing from the well "is tiny in relation to the total water volume." This flabbergasting comment came only two weeks before it was revealed that the amount of gushing oil was 19 times more than BP had been claiming.

Eleven oil workers are dead, thousands of Gulf Coast people have had their livelihoods devastated and unfathomable damage is being done to the gulf ecology. Imagine how the authorities would be treating the offender if BP were a person. It would've been put behind bars long ago — if not on death row.

National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.

The man who electrified the nation with his speech at the Democratic National Convention of 2004 put it to sleep tonight. President Obama’s address to the nation from the Oval Office was, to be frank, vapid. If you watched with the sound off you might have thought he was giving a lecture on the history of the Interstate Highway System. He didn’t have to be angry but he had at least to show passion and conviction. It is, after all, the worst environmental crisis in the history of the nation.

With the sound on, his words hung in the air with all the force of a fundraiser for your local public access TV station. Everything seemed to be in the passive tense. He had authorized deepwater drilling because he “was assured” it was safe. But who assured him? How does he feel about being so brazenly misled? He said he wanted to “understand” why that was mistaken. Understand? He’s the President of the United States and it was a major decision. Isn’t he determined to find out how his advisors could have been so terribly wrong?

Tomorrow he’s “informing” the president of BP of BP’s financial obligations. “Informing” is what you do when you phone the newspaper to tell them it wasn’t delivered today. Why not “directing” or “ordering?”

The President distinguished what has happened in the Gulf of Mexico from a tornado or hurricane because they are over quickly while the leak is an ongoing crisis, lasting many weeks and perhaps months more. He likened it to an “epidemic.” But the real difference has nothing to do with time. Tornadoes and hurricanes are natural disasters. Epidemics occur because germs mutate and spread. The spill occurred because of the recklessness and ruthlessness of a giant oil company in pursuit of profit.

And what has the nation learned from all this? The same lesson we’ve known for decades, according to the President. We must end our dependence on oil. But if we’ve known this for decades, why haven’t we done anything about it? The President endorsed the cap-and-trade bill that emerged from the House (without calling it cap-and-trade) but didn’t call for the only thing that may actually work: a tax on carbon.

I’m a fan of Barack Obama. I campaigned for him and I believe in him. I think he has a first-class temperament. I have been deeply moved and startled by his ability to speak about the nation’s most intractable problems. But he failed tonight to rise to the occasion. Is it because he’s not getting good advice, or because he’s psychologically incapable of expressing the moral outrage the nation feels?

Or is it something deeper?

Whether it’s Wall Street or health insurers or oil companies, we are approaching a turning point as a nation. The top executives of powerful corporations are pursuing profits in ways that menace the nation. We have not seen the likes since the late nineteenth century when the “robber barons” of finance, oil, railroads and steel ran roughshod over America. Now, as then, they are using their wealth and influence to buy off legislators and intimidate the regions that depend on them for jobs. Now, as then, they are threatening the safety and security of our people.

This is not to impugn the integrity of all business leaders or to suggest that private enterprise is inherently evil or dangerous. It is merely to state a fact that more and more Americans are beginning to know in their bones.

I’m sure our president knows it too. He must tell is like it is — not with rancor but with the passion and conviction of a leader who recognizes what is happening and rallies the nation behind him.

Not only did BP's detailed emergency response plan for the Gulf of Mexico call for saving walruses, why so did Exxon Mobil's, Conaco Phillip's, Chevron's, Shell's and virtually every other oil company drilling there. You wouldn't think there was so much concern about the Mexican Walrus, but evidently there is.

Rep. Bart Stupak (D-Mass.) took the companies to task for devoting substantially more of their plans to laying out its media response -- complete with pre-prepared press releases -- than on how it would limit the environmental damages caused by a spill.

"It could be said that BP is the one bad apple in the bunch, but it appears they have plenty of company," Stupak said.

Markey and Waxman both pointed out that four of the five companies noted in their Gulf spill-response plans how they would protect walruses, which do not live in the Gulf of Mexico.

"It's unfortunate that walruses are included, and it's an embarrassment that they were included," Exxon Mobil CEO Rex Tillerson said after being pressed by Markey early in the question-and-answer portion of the hearing.

Well, the explanation for this series of embarassments is really quite simple. All these oil companies outsourced their emergency response plans to the same company. That company, after being paid quite well I would assume, then went to their Xerox machine and simply copied the emergency response plan that they had already prepared for drilling in the Arctic. Then they simply Xeroxed it again and again as each company requested an emergency response plan. It only makes sense that each emergency response plan for the Gulf would be virtually identical. But not that an emergency response plan for the Gulf would be identical to one for the Arctic Circle!

But wait that's not all. All these emergency response plans contained the name and phone number of a man whom it was really, really important to call in case they got themselves into any kind of oil spill trouble. Only problem was that the emergency response plans for 2010 didn't adequately explain the fact that this man had been dead for five years. I assume his phone had been disconnected. You see it really is all about profits and not at all about safety. The oversight to oil company drilling, the MMS, was set up by James Watt, a Reagan appointee, whose philosophy, when it came to regulation, was "the hell with regulation, let the oil companies do anything they damn please." Is it any wonder then that BP has gotten itself into such a fine pickle? All their sought after profits are going flying out the window as they have to pay for this and they have to pay for that.

And it looks like all those anti-regulation guys who also got it passed through Congress to limit oil companies' liability to $75 million have gone down in defeat due to the enormity of the disaster because BP agreed today to put $20 billion in escrow to pay off economic claims. Bush and Cheney tried to put off the financial collapse of 2008 until the Democrats took over in 2009 but their timing was a little off. The collapse actually occurred during the tenure of their own administration. They were luckier with the Gulf disaster. All their anti-regulatory rhetoric and appointees didn't result in disaster until Obama took over. Therefore, as their logic goes, we should blame Obama. They set up the disaster; now it's Obama's job to clean it up, and, furthermore, to take the blame for it. And the blowhards of the right are doing everything in their power to stick Obama with the onus.

The oil administration of Bush and Cheney did everything in their power to favor oil company drilling and the continued use of oil for energy even though Carter had warned 30 years ago that that wasn't such a good idea due to the fact that we have to buy most of our oil from abroad and due to the fact that putting more carbon into the atmosphere is accelerating the pace of global warming. He installed solar panels on the roof of the White House which were peremptorily taken down by Ronald Reagan as he proclaimed Morning in America. We Americans shouldn't have to worry about such things as global warming. Let the gas guzzling resume, said Reagan.

Only now the chickens are coming home to roost in the form of flash floods caused by unheard of quantities of rain falling in a short period of time. This is directly attributable to global warming. The increased ferocity of storms and tornadoes can be attributed to global warming. The warmer the atmosphere the more precipitation there will be. The warmer the atmosphere, the higher wind velocities there will be. Put those together and you have a formula for increased destruction of life and property which we have seen recently in Nashville, Oklahoma City a campground in Arkansas and elsewhere. And it's all directly attributable to oil, the oil Carter wanted to phase out and the oil Reagan, Bush and Cheney gloried in.

If Carter's warnings had been heeded, we would be well on our way to a solarized America, an America in which wind power and other forms of alternative energy would be replacing oil. Instead, because we listened to Reagan, Bush and Cheney, America is losing its lead in green technology to China and other countries while we are reaping the whirlwind of natural and manmade disasters. And it's all about oil. The President must proclaim one area after another disaster zones and give them emergency Federal aid. That alone is breaking the budget. While scores of people are being killed by natural disasters and hardly any by terrorists, we are spending trillions on chasing a few al Quaeda stragglers and in the wrong places I might add. It's like that old song, "Looking for love in all the wrong places." We're looking for al Quaeda in all the wrong places. Hey, wake up. They're actually in Yemen, Somalia and America, and they're not killing Americans at anywhere near the same rate that natural and corporate funded disasters are. Maybe we should spend the money we're now spending on the military-industrial complex more wisely.

And now the US is too poor to invest in solar and wind energy. That must be left to private enterprise which isn't much interested. The oil industry has tons of lobbyists whose purpose in life is to see that oil remains the chief source of energy in the US and that the oil industry continues to receive subsidies and tax breaks when it should be paying royalties for every barrel drilled. Obama gives lip service to mass transit, high speed rail and solar and wind industries. But he is too poor and the US is too poor to do anything about it, and, besides, the oil companies want to keep things just the way they are until they figure out how to monopolize solar and wind energy. Then they might be interested in transferring over. Good luck with that.

June 16, 2010

WASHINGTON — A schism deepened Wednesday between U.S. war leaders and Congress as lawmakers – crucial Democrats among them – challenged Pentagon assertions that progress is picking up in Afghanistan.

"I wouldn't call it eroding," Democratic Sen. Carl Levin of Michigan said of once-solid Democratic support for President Barack Obama's war strategy. "But there's a lot of fair concern."

Congressional hearings stepped up pressure on the Pentagon, with Defense Secretary Robert Gates complaining about negative perceptions taking root in Washington about the war. Another top military official acknowledged feeling "angst" about the conflict.

But military leaders said the U.S. effort is advancing. "I think that we are regaining the initiative," Gates told a skeptical Senate panel. "I think that we are making headway."

The debate comes six months after Obama ordered 30,000 more Americans to the fight with the promise that troop withdrawals would begin in July 2011. That promise helped to placate Democrats who did not want an enduring troop commitment in Afghanistan.

But with the intervening months proving to be a long and deadly slog, and November elections approaching, it's becoming questionable whether Democratic backing can hold. And lawmakers were reminded Wednesday that there is no deadline for completing a troop pullout, and that the pace of withdrawal will depend on circumstances at the time.

Nowhere were congressional concerns more evident than in Wednesday's hearing by the Senate Appropriations Committee with Gates and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff.

Democratic Sen. Patty Murray of Washington said she was frustrated by the number of deaths among the Army Stryker units from her home state, while Sen. Byron Dorgan, D-N.D., asked whether it was even possible for the Afghan government to gain control of the country's disparate tribes.

"We've committed so many lives, so much money, here, and we've neglected so many things inside the borders of the United States," said Vermont Democratic Sen. Patrick Leahy.

Gates and Mullen sought to assure the lawmakers that the fight was worth it.

"We all have angst about this," Mullen said, but "we've put the resources in."

In a separate Senate hearing, Gen. David Petraeus, who oversees the war as head of U.S. Central Command, compared the conflict to a roller coaster ride with ups and downs similar to what was seen in Iraq.

"This is a tough, tough business," he said. " And those who are living it have to keep their eye on the horizon to ensure the trajectory is generally upward."

Military officials say most of the extra troops have arrived but it will take several more months before marked progress can be shown.

Even with reinforcements, the challenges are numerous. Crucial campaigns in the Afghan towns of Marjah and Kandahar are moving slower than expected; NATO remains short on personnel to train the Afghan security force; the Afghan government remains rife with corruption; and a recent spate of Taliban attacks has put June on track to become the deadliest month in the war.

As of Wednesday morning, at least 45 NATO members, including 28 Americans, were killed in Afghanistan in June. That mid-month tally compares with 51 NATO deaths in May and 33 in April.

Much of the debate on Capitol Hill has focused on when U.S. troops should leave. Obama's promise to start the withdrawal in July 2011 helped him with Democrats. But it prompted Republican charges that the U.S. was encouraging the Taliban and demoralizing its allies by setting a hard and fast withdrawal date.

To allay these fears, military officials have repeatedly said the number of troops and how soon they would leave will depend entirely on how the war is going.

They did so again Wednesday.

"We're just not going to know until we get much closer to July 2011 how many troops and where they'll come from, the pace and the place," Mullen said.

During a House hearing Wednesday, California Republican Rep. Buck McKeon asked Petraeus what conditions would have to be in place for troops to leave.

Petraeus said there would have to be better security and governance, and an Afghan security force able to contribute to that stability.

Asked what happens if those conditions don't exist, Petraeus said he would recommend a delay in the withdrawal.

"If that's what's necessary, that's what I will do," he said.

Petraeus' remarks were not likely to change that perception among many Afghans that U.S. support for the war is ebbing.

Afghans still have bitter memories of the 1980s and early 1990s, when the U.S. promised not to abandon the region after the withdrawal of the Soviet Union – then did just that. Civil war and the rise of the Taliban to power followed.

"Many Afghan officials and officers, and allied officers and diplomats, are at best confused and at worst privately believe that we will leave," wrote Anthony Cordesman with the Center for Strategic and International Studies in an analysis published Wednesday.

Cordesman wrote that the war "may well still be winnable, but it is not going to be won by denying the risks, the complexity and the time that any real hope of victory will take."

___

Associated Press writers Robert Reid in Kabul, Afghanistan, and Barry Schweid in Washington contributed to this report.

June 15, 2010

Rand Paul is proud of his libertarian credentials. He believes that government should just go away and let private corporations take over and run everything. Well, we've seen how that worked out as BP took shortcut after shortcut with their deep water oil drilling. Rand Paul doesn't believe that the government should tell anyone how to run their restaurant whether it pertains to the color of skin of the clientele or to whether or not the clientele should be allowed to smoke. Rand Paul has a lot to say about the trivia and the minutia of life, but when it comes to the really big stuff like subsidies to the most profitable corporations on earth, Rand Paul is strangely silent. He's so concerned about the nanny state with everyone sucking at the government's teat, but he's not concerned with profitable corporations sucking at the government's teat.

But there is little disagreement that the industry received significant federal support for such deep-water drilling. Since the government began aggressively issuing offshore drilling permits under President Ronald Reagan, the industry has received tens of billions of dollars in tax breaks and subsidies, including exemptions from royalty payments - the fees due when a company extracts resources from U.S. government property.

The royalty waiver program was established by Congress in 1995, when oil was selling for around $18 a barrel and drilling in deep water was seen as unprofitable without a subsidy. Today, oil sells for about $70 a barrel, but the subsidy continues.

The Government Accountability Office estimates that the deep-water waiver program could cost the Treasury $55 billion or more in lost revenue over the life of the leases, depending on the price of oil and gas and the performance of the wells.

Now Rand Paul might question why the most profitable corporations on the planet should be receiving royalty waivers and other tax breaks. Sure the fact that Deepwater Horizon was not subject to the same safety procedures that offshore oil rigs are subjected to in Norway and Venezuela, like drilling relief wells at the same time the main well is drilled thus preventing the same spectacle we're being treated to now of two months of oil gushing into the gulf while the relief well is being drilled, just follows from libertarian principles that government should keep its hands off and not tell private corporations how to conduct their business including safety and inspection procedures. But then for government to turn around and give oil companies tax breaks, royalty waivers and other forms of subsidies is just ludicrous according to libertarian principles or even just common sense.

The two most profitable American companies in 2009 according to Forbes were Exxon Mobil with $45 billion in profits and Chevron with $24 billion in profits. BP's profits for 2009 were only $14 billion, but it was not ranked by Forbes who only included American corporations in its rankings. BP is a British corporation, but $14 billion in profits would have ranked it fifth on the list right between General Electric and Wal Mart.

But then Rand Paul has nothing to say about government subsidies being given to Big Agriculture either. The Washington Post reported that the government paid $1.3 billion to farmers who didn't even farm in 2006.

The payments now account for nearly half of the nation's expanding agricultural subsidy system, a complex web that has little basis in fairness or efficiency. What began in the 1930s as a limited safety net for working farmers has swollen into a far-flung infrastructure of entitlements that has cost $172 billion over the past decade. In 2005 alone, when pretax farm profits were at a near-record $72 billion, the federal government handed out more than $25 billion in aid, almost 50 percent more than the amount it pays to families receiving welfare.

The Post's nine-month investigation found farm subsidy programs that have become so all-encompassing and generous that they have taken much of the risk out of farming for the increasingly wealthy individuals who dominate it.

The farm payments have also altered the landscape and culture of the Farm Belt, pushing up land prices and favoring large, wealthy operators.

But then wealthy corporate interests hire tons of lobbyists to make sure that the wealthy keep on sucking at the government's teat. Evidently this is all right with Rand Paul and other libertarians. They are not speaking out about this.

Senator Bernie Sanders has called for ending the $35 billion in tax breaks given to the oil and gas industry with the money put into the alternative energy industry instead. Tonight President Obama is giving a major speech about the disaster in the Gulf. Will he call for putting the money into solar, wind and other forms of alternative energy as well and taking government subsidies away from the oil and gas industry?

The Marshall Islands, not the U.S., had the main responsibility for safety inspections on the Deepwater Horizon.

Reporting from Washington — The Deepwater Horizon oil rig that exploded in the Gulf of Mexico was built in South Korea. It was operated by a Swiss company under contract to a British oil firm. Primary responsibility for safety and other inspections rested not with the U.S. government but with the Republic of the Marshall Islands — a tiny, impoverished nation in the Pacific Ocean.

And the Marshall Islands, a maze of tiny atolls, many smaller than the ill-fated oil rig, outsourced many of its responsibilities to private companies.

Now, as the government tries to figure out what went wrong in the worst environmental catastrophe in U.S. history, this international patchwork of divided authority and sometimes conflicting priorities is emerging as a crucial underlying factor in the explosion of the rig.

Under International law, offshore oil rigs like the Deepwater Horizon are treated as ships, and companies are allowed to "register" them in unlikely places such as the Marshall Islands, Panama and Liberia — reducing the U.S. government's role in inspecting and enforcing safety and other standards.

"Today, these oil rigs can operate under different, very minimal standards of inspection established by international maritime treaties," said Rep. James L. Oberstar (D-Minn.), chairman of the House Transportation Committee.

Some offshore drilling experts, as well as some survivors of the explosion that led to the massive spill, say foreign registration also permitted a confusing command structure and understaffing — factors that may have contributed to the disaster.

Senior members of Congress — including Oberstar and House Natural Resources Committee Chairman Nick J. Rahall II (D-W.Va.) — have begun looking into the inspection and staffing issues. The House Subcommittee on Coast Guard and Maritime Transportation will hold a hearing Thursday on foreign-flagged rigs in the Gulf of Mexico.

Different types of rigs are classified differently, and the Marshall Islands assigned the Deepwater Horizon to a category that permitted lower staffing levels.

"Over the years, the manning dwindled down and down," said Douglas Harold Brown, chief mechanic aboard the Deepwater Horizon, who had been assigned to the floating drilling rig since shortly after it was manufactured in 2000. "I believe that safety was compromised by this," he said in an interview.

Even as the legislation gets tougher on banks by the week, agents of influence are hardly strangers on Capitol Hill. Many once worked for the lawmakers they're lobbying.

Rep. Barney Frank, chairman of a panel resolving differences in House and Senate bills, and Sen. Chris Dodd, who shepherded the Senate's measure, have their hands full fending off industry efforts to dilute the final legislation. They must do so while trying to hold together a fragile Senate coalition with only four Republicans.

So sticking points in this legislative tempest, whether over big banks' exotic trades or the plastic in people's wallets, are awfully tricky.

At least 56 industry lobbyists have served on the personal staffs of the 43 Senate and House members who will shape the legislation over the next two weeks, according to Public Citizen and the Center for Responsive Politics, two government watchdogs.

What's more, the center found that lawmakers on the committee settling differences between the House and Senate versions have received more than $112 million over two decades from political action committees or employees of industries affected by the legislation.

A look at the main issues to be settled and how lobbyists come down on them as lawmakers try to deliver on President Barack Obama's request to give him a bill to sign by July 4.

Derivatives:

Many corporations typically use these unregulated securities as a hedge against market fluctuations. For instance, an airline may try to soften the cost of a potential rise in fuel prices by betting in the derivatives market that fuel prices will rise. But derivatives have become instruments for risky speculation. The legislation would require that they be traded in regulated exchanges.

The toughest Senate provision would force banks to shed most of their lucrative derivatives business.

The proposal's chief advocate is Sen. Blanche Lincoln, D-Ark., who survived liberal and labor attacks during a hard-fought primary runoff largely by spotlighting her anti-Wall Street stance. Now she's stronger in the debate.

The Obama administration and bank regulators have said her proposal goes too far.

Large banks are apoplectic, watching as it gains strength over time.

Volcker Rule:

A Senate plan known as the Volcker rule, after former Fed Chairman Paul Volcker, would prohibit banks from betting on the markets with their own money. It would let regulators determine the best way to put into place that prohibition, which would apply to all securities trades, not just derivatives.

Several Democratic lawmakers want to strengthen that by giving regulators less latitude to modify the prohibition, and by preventing financial firms from betting against securities they assemble for their clients.

Large banks see billions of dollars in trades slipping away. They prefer a House plan that merely says regulators could ban such trades. But Frank appears set on the tougher route.

Debit card fees:

Americans use debit cards more than credit cards. But their use costs merchants money: For every swipe, merchants pay 1 percent to 2 percent to banks and credit networks.

A proposal that passed the Senate would require the Federal Reserve to limit those fees, and it has created a lobbying donnybrook between banks and retailers.

Most of the fees go to banking giants. But the face of the lobbying effort has been small community banks and credit unions that say they will be disproportionately hurt if they lose such fees.

The proposal excludes banks with assets under $10 billion. Officials at small banks say their institutions still would have to lower their fees to compete with bigger banks or drop their debit card programs.

Consumer protections:

The final legislation would create a government consumer financial protection entity. This was once considered the most contentious step sought by the administration.

The House bill exempted accountants, tax preparers, real estate agents and auto dealers from this oversight. The Senate bill has no such exceptions.

Auto dealers have lobbied fiercely to be excluded from the law's reach, arguing that they assemble loans but don't administer them. Obama has fought back, elevating the issue to a test of White House strength.

June 13, 2010

Fear of 'Secret Cables' Fuels Pentagon Manhunt for Wikileaks Founder

Anxious that Wikileaks may be on the verge of publishing a batch of secret State Department cables, investigators are desperately searching for founder Julian Assange.

by Philip Shenon

Pentagon investigators are trying to determine the whereabouts of the Australian-born founder of the secretive website Wikileaks for fear that he may be about to publish a huge cache of classified State Department cables that, if made public, could do serious damage to national security, government officials tell The Daily Beast.

Australian-born Julian Assange in this file photo. American officials said Pentagon investigators are convinced that Assange is in possession of at least some classified State Department cables leaked by a 22-year-old Army intelligence specialist, Bradley Manning of Potomac, Maryland, who is now in custody in Kuwait. (Photo: Sydney Morning Herald)

The officials acknowledge that even if they found the website founder, Julian Assange, it is not clear what they could do to block publication of the cables on Wikileaks, which is nominally based on a server in Sweden and bills itself as a champion of whistleblowers.

American officials said Pentagon investigators are convinced that Assange is in possession of at least some classified State Department cables leaked by a 22-year-old Army intelligence specialist, Bradley Manning of Potomac, Maryland, who is now in custody in Kuwait.

And given the contents of the cables, the feds have good reason to be concerned.

As The Daily Beast reported June 8, Manning, while posted in Iraq, apparently had special access to cables prepared by diplomats and State Department officials throughout the Middle East, regarding the workings of Arab governments and their leaders, according to an American diplomat.

The cables, which date back over several years, went out over interagency computer networks available to the Army and contained information related to American diplomatic and intelligence efforts in the war zones in Afghanistan and Iraq, the diplomat said.

American officials would not discuss the methods being used to find Assange, nor would they say if they had information to suggest where he is now. "We'd like to know where he is; we'd like his cooperation in this," one U.S. official said of Assange.

Assange, who first gained notoriety as a computer hacker, is as secretive as his website and has no permanent home.

Investigators may get their chance Friday night, when Assange is scheduled to appear at an Investigative Reporters and Editors conference in Las Vegas. Whether he will physically appear at the conference is anyone's guess.

Last week, Assange was scheduled to join famed Pentagon Papers leaker Daniel Ellsberg for a talk at New York's Personal Democracy Forum. Assange appeared via Skype from Australia instead, saying lawyers recommended he not return to the United States.

Assange was in the United States as recently as several weeks ago, when he gave press interviews to promote the website's release of an explosive 2007 video of an American helicopter attack in Baghdad that left 12 people dead, including two employees of the news agency Reuters.

Wikileaks has not replied directly to email messages from The Daily Beast.

However, in cryptic messages he sent this week via Twitter, Wikileaks referred to an earlier Daily Beast article on the investigation of Manning and said that it "looks like we're about to be attacked by everything the U.S. has."

In an earlier post, the site said that allegations that "we have been sent 260,000 classified U.S. embassy cables are, as far as we can tell, incorrect."

This morning, a new Wikileaks tweet went out: "Any signs of unacceptable behavior by the Pentagon or its agents towards this press will be viewed dimly."

In one post, the site said that allegations that "we have been sent 260,000 classified U.S. embassy cables are, as far as we can tell, incorrect."

Pentagon investigators say that particular post may have been an effort by Wikileaks to throw them-and news organizations-off the track as the site prepared the library of State Department cables for release, officials said.

"It looks like they're playing some sort of semantic games," one American official said of Wikileaks. "They may not have 260,000 cables, but they've probably got enough cables to make trouble."

In another cryptic Twitter message, the site said that while the State Department might be alarmed about the prospect of the release of classified cables, "we have not been contacted."

American officials were unwilling to say what would happen if Assange is tracked down, although they suggested they would have many more legal options available to them if he were still somewhere in the United States.

Manning has reportedly admitted that he downloaded 260,000 diplomatic cables and provided them to Wikileaks. In Internet chat logs first revealed by Wired magazine, Manning also took credit for leaking the 2007 video to the website.

"Hillary Clinton and several thousand diplomats around the world are going to have a heart attack when they wake up one morning and find an entire repository of classified foreign policy is available," Manning wrote of the diplomatic cables, according to Wired.

Wikileaks has not confirmed that Manning is a source of any information posted on the site. "We do not know if Mr. Manning is our source, but the U.S. military is claiming he is, so we will defend him," Wikileaks said in another Twitter message.

Manning was turned in to the Pentagon by a former computer hacker based in California, Adrian Lamo, after Manning approached Lamo for counsel. Manning is believed to have contacted Lamo after reading a recent profile of him in Wired.

In the chat log revealed by Wired, Manning bragged to Lamo about having downloaded a huge library of State Department cables, as well as the 2007 video of the helicopter attack, and having provided the material to Wikileaks.

Manning took credit for having leaked a classified diplomatic cable that has already appeared on the site-a memo prepared by the United States embassy in Reykjavik, Iceland, that described a meeting there between American and Icelandic officials over that country's banking meltdown.

The January 2010 memo may have been of special interest to Wikileaks given the site's close ties to Iceland, where Assange has based himself at times and where he worked with local lawmakers to draft free-speech laws that give broad freedom to journalists to protect their sources.

A profile this week in The New Yorker magazine depicted Assange feverishly at work with Icelandic colleagues in Reykjavik in March as he organized the release of the 2007 video of the helicopter attack. The edited video was given the title Collateral Murder, and its release infuriated officials at the Defense Department.

With its network of whistleblowers, Wikileaks has published documents and videos on its site that have outraged other foreign governments. To protect the site from attack by intelligence agencies, Assange has placed Wikileaks on several Internet servers, making it all but impossible for any government to shut down the site entirely.

Is there a Global War Between Financial Theocracy and Democracy?

by Les Leopold

Senate and House conferees are about to reconcile a financial reform bill that is virtually designed to institutionalize "too big to fail." And when they do we'll lose another battle in the ongoing war between global financial markets and democratic nation-states.

This war has been going on for decades -- but democracy hasn't always been in full retreat.

The New Deal Conquest: During the Great Depression democratic forces gained the upper hand in the war. We realized that financial markets, which are driven by the largest banks and financiers, had to be tightly controlled. We knew that global speculation on currencies only deepened the Depression and had to be strictly limited. We knew that an iron curtain was needed between commercial and investment banking to protect Main Street depositors from market madness (that was the Glass-Steagall Act). And most importantly we knew that the key to preventing economic upheaval was to limit the wealth of the super-rich and to increase the wealth of working people through progressive taxes, Social Security, wage and hour laws, and the promotion of unionization. The Bretton Woods agreements forged by the Allies during WWII set up strict rules for global finance, rules that kept financiers in check for more than a quarter century.

And it worked pretty damn well. As economist Joseph Stiglitz points out, this era saw only one financial crisis (Brazil, 1964), and working people in western democracies made huge gains. Since the era of deregulation took hold in the late 1970s, the world has suffered over a hundred financial crises and middle-class incomes have stagnated.

The Deregulatory Counter-Offensive: By the late 1970s, bankers regained the advantage through the spread of a new faith in self-regulated markets. The economic apostles of unfettered markets lobbied against progressive taxes, unions, and social welfare programs. The new orthodoxy was: Let the elites collect the money--they'll invest wisely (instead of consuming), and all boats will rise. This near-religious revolution rapidly spread through the economic and policy establishment. Regulations were dismantled right and left, and the revolving door between government and Wall Street started spinning. The American financial catechism ruled the world. And on Wall Street, the money tap was open. It did not trickle down.

Then, suddenly, in 2008, the market gods destroyed themselves as the unregulated financial casinos crashed and burned, just like they did in 1929. For a few months, it seemed like the deregulatory theology become a global heresy. It was obvious that Wall Street's reckless speculation and its bold new wave of financial engineering had caused the Great Recession. (See The Looting of America for an accessible account.). It was also clear that if government didn't come to the rescue, Wall Street would lay in ruins, along with the rest of the economy. This was the perfect moment for democracy reassert democratic control on financial markets, just as we did during the New Deal. We blew it.

The Victory at Too Big to Fail: At the moment when Wall Street was on its knees, we decided to bypass serious reform. Instead, we rebuilt Wall Street, using taxpayer money and guarantees - more than $10 trillion worth. We let bankers use our bailout money to pay themselves $150 billion in bonuses -- at a moment when over 29 million Americans were jobless or forced into part-time jobs. We allowed the top hedge fund managers to walk off with over $900,000 an hour (not a typo) in 2009. Windfall profits taxes? No. In fact we let hedge fund honchos pay an extra-low tax rate by calling their income "capital gains." We didn't restore Glass-Steagall, we didn't break up "too big to fail" financial institutions. In fact the biggest banks became even bigger, courtesy of the U.S. government.

The Invasion against Democracy: The war is escalating. Right now, financial elites aren't just fighting a defensive battle against new regulations. They're playing offense: They're whipping up deficit hysteria around the globe and calling for drastic cuts in middle class programs. Why? They want to ensure that their loans to governments aren't threatened by rising public debt. Ironically, the public debt they're so worried about was created in large part by them -- the result of huge bailouts and other expenses stemming from the crash they caused. Although the bankers want us to dismantle what remains of our worker-oriented policies, welfare for the financial elites is still fine and dandy.

This is the most dangerous counter attack in the history of finance. We had better know a great deal more about the attackers. Who makes up this shadowy force called "global markets"? Who fights their battles? Do they have a high command?

Not really. There is no executive committee of financial elites. There's no international conspiracy, no Elders of Zion. Instead these markets are pulled and pushed by about 50 very large banks and financial institutions. This is where much of the nation's $2 trillion in hedge fund money roams. This is where the top six US banks frolic. They don't have to sit around a table strategizing. They instantly sense threats to their power. They instantly smell profitable openings and they're poised to grab what they can, whenever they can. They thrive on turmoil, which gives them new "proprietary" trading opportunities to exploit. Volatility means big bucks, especially now that the largest players know that the government will back up even their wildest gambles. History has just proven that they are way too big to fail.

Of course they still have to lobby government officials--many of whom either were bankers, or will be once they leave office. But their most powerful lever on government is through the market itself: Here, by moving vast quantities of money around, they can instantly veto policies they don't like. If the EU talks seriously about financial transaction taxes, the markets go down the Euro grows weaker, and interest rates rise--making it more expensive for governments to borrow the money they need to operate. Politicians have learned to "listen" to the markets and are conditioned to placate them.

Should a nation state get out of line (Greece, Italy, Spain, Portugal, etc), the markets slap them silly. Politicians rush to the scene and start slicing social spending. If instead they demand new taxes on financial elites to reduce public debt, the markets respond with even more fury. Money flees.

All the external machinery of democracy still clanks along. We still pull the levers in the voting booth. But the decisions that affect us the most are made in a profoundly undemocratic way. Faceless financial markets exercise far more control over politicians than the voters who elected them.

So the problem isn't just the corporate campaign contributions, or corporate media control or the academic consensus supporting our financial theocracy. It's the raw power of the markets. They've been roaming free and virtually unregulated for more than a generation, and now their power is unparalleled. Just months after they brought our economy crashing down, they're right back to their old tricks, setting the stage for the next crash and the next bailout while getting filthy rich along the way.

Bill Clinton nailed it on the head when he reportedly said:

"You mean to tell me that the success of the economic program and my reelection hinges on the Federal Reserve and a bunch of fxxxing bond traders?" (See Agenda by Bob Woodward)

No Retreat, No Surrender? There's no room for pacifists in this war. Clearly, Wall Street and its global minions are not seeking a truce. Instead, they're coming after our Social Security, Medicare and Medicaid programs. They want us to work longer before we retire and get less when we do. They want us to pay more for health care and get less of it. They want less public money to go to schools, teachers and public infrastructures. And they want us to get used to a jobless recovery with double digit unemployment rates. (And when millions and millions of people are unemployed, we can't maintain high labor standards, and our wages and benefits erode.) In short, they want to undermine all the policies and programs that have built and sustained middle class life.

Already government officials in the UK, Germany and here are telling us we must endure austerity for "decades to come." As Fed Chair Ben Bernanke candidly put it:

"We can see what problems can arise in a country if investors lose confidence in the fiscal position of that country, so it is very important that we address this problem."

Of course, he's not going to point out that this austerity is only for the masses, definitely not for the financial elites. Or that the underlying cause of the debt investors are so worried about is the giant economic crater caused by the very same financial elites who now might "lose confidence" in financing a middle class society.

We shouldn't kid ourselves about the pitched battles ahead. Fighting back won't be easy, and winning will be even harder. People in country after country will have to mobilize themselves in defense of real democracy, in defense of each nation's right to provide its people with a decent quality of life. In my opinion, that includes sustainable jobs with decent benefits and a solid public infrastructure that promotes equity, protects the vulnerable and enriches the environment.

Unfortunately, no one can guarantee that democracy will prevail in the war against financial theocracy -- just recall the totalitarian chaos in Europe during the Great Depression. But don't count it out, either. It's true that many of us regular folks have been diverted by the media, distracted by the Internet or lulled into a stupor by pharmaceuticals. But when we realize that we've been shoved into a corner with no way out, we'll act. A popular struggle will begin. And when it does, we'll at least have a fighting chance to recapture our democratic souls.

“Recognizing the complexity of this challenge, every effort must be expended to speed up the process.” BP’s plans don’t “go far enough to mobilize redundant resources” in the event of an equipment failure or another problem. “BP must identify in the next 48 hours additional leak containment capacity that could be operationalized and expedited to avoid the continued discharge of oil.”

Translated: You’re dragging your heels and aren’t even using all the equipment you have, damn it. You better, or I’ll … I’ll … .

BP spokesman Jon Pack said the company received Watson’s letter and would respond to it as soon as possible.

Translated: Too bad. Have a nice weekend.

The Administration has not used legal authority to order BP to do a thing, because it hasn’t asserted any legal authority.

Meanwhile, the White House backed off its suggestion earlier in the week that it could stop BP from paying a giant dividend to its shareholders. That suggestion had caused BP shares to plummet and pressure to build on Britain’s new Prime Minister David Cameron. 12 percent of dividends paid to pensioners in the UK come from BP. Cameron and Obama had a friendly chat Saturday, assuring one another BP is important to both countries.

You see where all this is heading. At some point there’s likely to be a direct conflict. Like any big corporation, BP has legal duties to repay its creditors and to maximize the share prices of its stockholders. Its duties to the United States are still vague and unknown. The Oil Pollution Act of 1990 can be interpreted in various ways. So far, the Administration hasn’t tried.

Yet BP is still in control of what’s happening in Gulf to stop the worst environmental disaster in U.S. history.

BP still has lots of money. But the final cost of plugging the leak in the Gulf, containing the spill, cleaning up after it, and paying all damages – including lost wages to millions of workers whose jobs have been lost or will be if the spill keeps tourists away – could easily be tens of billions of dollars. And right now BP’s first responsibility is to its creditors and shareholders, not to the American public.

So if it’s UK pensioners versus American workers and property owners, who wins? More to the point, who’s going to decide? Most likely, a judge – or several judges, here and in the UK, through a mountain of litigation that will keep thousands of attorneys, solicitors, and barristers busy for decades.

In the meantime, months or even years could go by as Coast Guard admirals and rear admirals, as well as the White House, tells BP it needs to spend more to stop and clean up the mess it’s created, it’s going way too slow, and it’s not divulging what it knows. And BP shrugs and says it’s doing all it can.

I’ve got a better idea. Wouldn’t it be far simpler for the White House (stating that the Pollution Control Act of 1990 gives it authority) to put BP’s American operations into temporary receivership? That way, Obama can take over BP’s assets here and use its expertise to stop the leak and clean up the mess as soon as possible — and leave the subsequent years of bickering to the courts.

That is where the Pentagon'sDefense Logistics Agency comes in. It is the DLA's job to manage and buy huge amounts of spare parts to make certain that the military is ready and operating.

However, a new report from the Government Accounting Office found that the agency is ordering so many supplies, it is leading to tremendous waste. The DLA has bought billions of dollars worth of equipment at taxpayer expense that is not even needed by the military.

"The Pentagon is wasting an enormous amount of money. In this case it's the Defense Logistics Agency," he told ABC News. "They have $13 billion in inventory [...] $7 billion of that is spare parts they don't need."

That's right, $7 billion in spare parts -- a full half of the inventory -- won't be needed by the military, leaving warehouses stuffed with brand new equipment that is simply gathering dust.

230 Covers Ordered When Only 35 Were Needed

For example, the DLA purchased 230 aircraft access covers used when repairing the B1 bomber.

At $3,900 a piece, that order adds up to $897,000. But the agency found out that only 35 would be needed, too late to save taxpayers some $760,000.

In Feb. 2009, the DLA bought 1,200 winches for the vehicles, which were delivered in May of that year. In the interim, forecasted demand for the item dropped from 51 per month to just six per month. Using the new rate of demand, the inventory would last for 20 years. If they had changed the order based on the adjusted demand rate, the agency could have saved $691,000.

$7 Billion in Missed Savings

The list of missed savings opportunities goes on, for a $7 billion total. That could have covered the entire budget for the National Science Foundationor paid for half the cost of the 2010 Census. In fact, $7 billion in savings could actually take care of the Defense Department's own budget reduction goal.

In a statement to ABC News the DLA said they welcome the report and that they have "been taking positive steps to decrease our inventory of spare parts. "

The statement goes on to say they will continuing using the GAO's reccomendations to make improvements and that they "have also redefined our processes and implemented a new information systems architecture to improve our demand forecasting, and we continue with these efforts."

"The communications between the Army, Navy, Air Force and the Defense Logistics Agency, according to the GAO, is very, very poor," said Sanders.

The problem lies in DLA's ability to adjust to demand needs.

"Sometimes they are saying they need parts when in fact that is not accurate," he said. "Here's some irony here, in some instances, we don't have the parts that the military actually needs, in the middle of two wars. So the communications process is very, very faulty."

Sanders said that while some of the spare parts are sold, others are simply thrown away.

It's now too late for savings from spare parts, because taxpayers have already paid the bill. But the GAO hopes that this time, lessons have been learned.

In his recent news conference, George Bush Jr. suggested that our nation's "problem" with high gasoline prices was caused by the lack of a national energy policy, and tried to blame it all on Bill Clinton. First, Junior said, "This is a problem that's been a long time in coming. We haven't had an energy policy in this country."

This was followed by, "That's exactly what I've been saying to the American people -- 10 years ago if we'd had an energy strategy, we would be able to diversify away from foreign dependence. And -- but we haven't done that. And now we find ourselves in the fix we're in." As is so often the case, Bush was lying.

Consider President Jimmy Carter's April 18, 1977 speech. Since it was given nearly three decades ago, when many of the reporters in Bush's White House were children, it's understandable that they don't remember it. But it's inexcusable that Bush and the mainstream media (which, after all, has the ability to do research) would completely ignore it. It was the speech that established the strategic petroleum reserve, birthed the modern solar power industry, led to the insulation of millions of American homes, and established America's first national energy policy. "With the exception of preventing war," said Jimmy Carter, a man of peace, "this is the greatest challenge our country will face during our lifetimes."

He added: "It is a problem we will not solve in the next few years, and it is likely to get progressively worse through the rest of this century. "We must not be selfish or timid if we hope to have a decent world for our children and grandchildren.

"We simply must balance our demand for energy with our rapidly shrinking resources. By acting now, we can control our future instead of letting the future control us." Carter bluntly pointed out that: "The most important thing about these proposals is that the alternative may be a national catastrophe. Further delay can affect our strength and our power as a nation." He called the new energy policy he was proposing, "[T]he 'moral equivalent of war' -- except that we will be uniting our efforts to build and not destroy."

When Carter had become president three months earlier, the nation was still recovering from the "oil shock" of the 1973 Arab oil embargo, and scientists were realizing our nation was just then hitting the point of domestic peak oil production predicted more than a decade earlier by scientist M. King Hubbert. (The rest of the world is hitting the Hubbert Peak right now.) As Carter noted in his speech, "The oil and natural gas we rely on for 75 percent of our energy are running out. In spite of increased effort, domestic production has been dropping steadily at about six percent a year. Imports have doubled in the last five years. Our nation's independence of economic and political action is becoming increasingly constrained." Hubbert had predicted that the peak of oil production for the USA would come in the 1970s, and it did, hitting us with a shock.

"The world has not prepared for the future," said Jimmy Carter. "During the 1950s, people used twice as much oil as during the 1940s. During the 1960s, we used twice as much as during the 1950s. And in each of those decades, more oil was consumed than in all of mankind's previous history." Hubbert said we must begin to conserve. Carter agreed.

"Ours is the most wasteful nation on earth," he said, a point that is still true. "We waste more energy than we import. With about the same standard of living, we use twice as much energy per person as do other countries like Germany, Japan and Sweden." Carter directly challenged the fossil fuel and automobile industries. "One choice," he said, "is to continue doing what we have been doing before. We can drift along for a few more years. "Our consumption of oil would keep going up every year. Our cars would continue to be too large and inefficient. Three-quarters of them would continue to carry only one person -- the driver -- while our public transportation system continues to decline. We can delay insulating our houses, and they will continue to lose about 50 percent of their heat in waste. "We can continue using scarce oil and natural gas to generate electricity, and continue wasting two-thirds of their fuel value in the process."

But that would be unpatriotic, anti-American, and essentially wrong. Who but a traitor sold out to special interests, or an idiot, would countenance such insanity?

The year 1977 was a turning point for America. If we didn't make clear and rapid progress, we would face painful times ahead. The Saudis would have their fingers around our necks. We'd face war in the Middle East to secure future oil supplies. "Now we have a choice," Carter said. "But if we wait, we will live in fear of embargoes. We could endanger our freedom as a sovereign nation to act in foreign affairs."

Failure to act in the 1970s and 1980s would inevitably lead to a time when the only way to maintain our lifestyle would be to rape our planet and seize control of oil-rich nations in the Middle East. If we didn't begin to develop alternatives like solar power, and dramatically reduce our consumption of fossil fuels, then, Carter said, even our cherished personal freedoms would be at risk. If we continued to simply follow past policies that enriched the oil industry and the Saudis, instead of becoming energy independent, Carter said, "We will feel mounting pressure to plunder the environment."

If we failed to develop alternative sources of renewable energy and conserve what we have, the alternative could be nasty. As Carter pointed out: "We will have a crash program to build more nuclear plants, strip-mine and burn more coal, and drill more offshore wells than we will need if we begin to conserve now. Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country. "If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions."

Carter's speech drew a strong reaction from the Saudis and the oil industry. Think tanks soon emerged - many whose names are today familiar - to suggest there was really no energy problem, and they led the charge to establish a permanent right-wing media in the US. Within two years, Saudi citizen and oil baron Salem bin Laden's sole US representative, James Bath, would funnel cash into the failing business of the son of the CIA's former director, political up-and-comer George H. W. Bush. With that money from the representative of Osama Bin Laden's half-brother, George Bush Jr. was able to keep afloat his Arbusto ("shrub" in Spanish) Oil Company. And he would be in the pocket of the bin Laden and Saudi interests for the rest of his life. But Carter was incorruptible.

"We can be sure that all the special interest groups in the country will attack the part of this plan that affects them directly," he said. "They will say that sacrifice is fine, as long as other people do it, but that their sacrifice is unreasonable, or unfair, or harmful to the country. If they succeed, then the burden on the ordinary citizen, who is not organized into an interest group, would be crushing." But that would be wrong. It would be un-American. It would lead to future oil shocks, and the probable death of American soldiers in Middle Eastern oil wars. Instead of caving in to the Saudis and the oil industry, Carter said: "There should be only one test for this program: whether it will help our country."

Two years later, as the bin Laden family's sole US representative was bailing out George Bush Junior's failing oil business, Jimmy Carter gave another speech on energy, further refining his national energy policy. He had already started the national strategic petroleum reserve, birthed the gasohol and solar power industries, and helped insulate millions of homes and offices. But he wanted to go a step further. "I am tonight setting a clear goal for the energy policy of the United States," Carter said on July 15, 1979. "Beginning this moment, this nation will never use more foreign oil than we did in 1977 -- never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s..." In addition, we needed to immediately begin to develop a long-range strategy to move beyond fossil fuel.

Therefore, Carter said, "I will soon submit legislation to Congress calling for the creation of this nation's first solar bank, which will help us achieve the crucial goal of 20 percent of our energy coming from solar power by the year 2000." But then came the Iran/Contra October Surprise, when the Reagan/Bush campaign allegedly promised the oil-rich mullahs of Iran that they'd sell them missiles and other weapons if only they'd keep our hostages until after the 1980 Carter/Reagan presidential election campaign was over. The result was that Carter, who had been leading in the polls over Reagan/Bush, steadily dropped in popularity as the hostage crisis dragged out, and lost the election. The hostages were released the very minute that Reagan put his hand on the Bible to take his oath of office. The hostages freed, the Reagan/Bush administration quickly began illegally delivering missiles to Iran.

And Ronald Reagan's first official acts of office included removing Jimmy Carter's solar panels from the roof of the White House, and reversing most of Carter's conservation and alternative energy policies.

Today, despite the best efforts of the Bushies, the bin Ladens, and the rest of the oil industry, Carter's few surviving initiatives have borne fruit.

It is now more economical to build power generating stations using wind than using coal, oil, gas, or nuclear. When amortized over the life of a typical mortgage, installing solar power in a house in most parts of the US is cheaper than drawing power from the grid. (Shell and British Petroleum are among the world's largest manufacturers of solar photovoltaic panels, which can now even be used as roofing shingles.) And hybrid cars that get 50-70 miles to the gallon are increasingly commonplace on our nation's highways. Instead of taking a strong stand to make America energy independent, Bush kisses a Saudi crown prince, then holds hands with him as they walk into Bush's hobby ranch in Texas. Our young men and women are daily dying in Iraq - a country with the world's second largest store of underground oil. And we live in fear that another 15 Saudis may hijack more planes to fly into our nation's capitol or into nuclear power plants.

Meanwhile, Bush brings us an energy bill that includes eight billion dollars in welfare payments to the oil business, just as the nation's oil companies report the highest profits in the entire history of the industry. Americans struggle to pay for gasoline, while the Bush administration refuses to increase fleet efficiency standards, stop the $100,000 tax break for buying Hummers, or maintain and build Amtrak. George Bush Jr. is arguably right that gas prices are spiking because we don't have an energy policy. But instead of blaming Clinton, he should be pointing to the Reagan/Bush administration, and to his own abysmal failures over the past four years.

The energy policies of the Carter administration and the Bush/Cheney administration couldn't have been more different. If we'd only followed Carter's advice, the US today would be well on its way to using renewable energy resources and importing far less foreign oil. If only Carter had been reelected instead of Reagan. Carter called for the US to achieve the goal of having 20% of its energy coming from solar power by the year 2000. Carter put solar panels on the White House. Reagan took them off. If only, if only ...

In little more than two decades we've gone from a position of energy independence to one in which almost half the oil we use comes from foreign countries, at prices that are going through the roof. Our excessive dependence on OPEC has already taken a tremendous toll on our economy and our people. This is the direct cause of the long lines which have made millions of you spend aggravating hours waiting for gasoline. It's a cause of the increased inflation and unemployment that we now face. This intolerable dependence on foreign oil threatens our economic independence and the very security of our nation. The energy crisis is real. It is worldwide. It is a clear and present danger to our nation. These are facts and we simply must face them.

What I have to say to you now about energy is simple and vitally important.

Point one: I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 1977 -- never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade -- a saving of over 4-1/2 million barrels of imported oil per day.

Point two: To ensure that we meet these targets, I will use my presidential authority to set import quotas. I'm announcing tonight that for 1979 and 1980, I will forbid the entry into this country of one drop of foreign oil more than these goals allow. These quotas will ensure a reduction in imports even below the ambitious levels we set at the recent Tokyo summit.

Point three: To give us energy security, I am asking for the most massive peacetime commitment of funds and resources in our nation's history to develop America's own alternative sources of fuel -- from coal, from oil shale, from plant products for gasohol, from unconventional gas, from the sun.

I propose the creation of an energy security corporation to lead this effort to replace 2-1/2 million barrels of imported oil per day by 1990. The corporation I will issue up to $5 billion in energy bonds, and I especially want them to be in small denominations so that average Americans can invest directly in America's energy security.

Just as a similar synthetic rubber corporation helped us win World War II, so will we mobilize American determination and ability to win the energy war. Moreover, I will soon submit legislation to Congress calling for the creation of this nation's first solar bank, which will help us achieve the crucial goal of 20 percent of our energy coming from solar power by the year 2000.

These efforts will cost money, a lot of money, and that is why Congress must enact the windfall profits tax without delay. It will be money well spent. Unlike the billions of dollars that we ship to foreign countries to pay for foreign oil, these funds will be paid by Americans to Americans. These funds will go to fight, not to increase, inflation and unemployment.

Point four: I'm asking Congress to mandate, to require as a matter of law, that our nation's utility companies cut their massive use of oil by 50 percent within the next decade and switch to other fuels, especially coal, our most abundant energy source.

Point five: To make absolutely certain that nothing stands in the way of achieving these goals, I will urge Congress to create an energy mobilization board which, like the War Production Board in World War II, will have the responsibility and authority to cut through the red tape, the delays, and the endless roadblocks to completing key energy projects.

We will protect our environment. But when this nation critically needs a refinery or a pipeline, we will build it.

Point six: I'm proposing a bold conservation program to involve every state, county, and city and every average American in our energy battle. This effort will permit you to build conservation into your homes and your lives at a cost you can afford.

I ask Congress to give me authority for mandatory conservation and for standby gasoline rationing. To further conserve energy, I'm proposing tonight an extra $10 billion over the next decade to strengthen our public transportation systems. And I'm asking you for your good and for your nation's security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel. Every act of energy conservation like this is more than just common sense -- I tell you it is an act of patriotism.

Our nation must be fair to the poorest among us, so we will increase aid to needy Americans to cope with rising energy prices. We often think of conservation only in terms of sacrifice. In fact, it is the most painless and immediate way of rebuilding our nation's strength. Every gallon of oil each one of us saves is a new form of production. It gives us more freedom, more confidence, that much more control over our own lives.

So, the solution of our energy crisis can also help us to conquer the crisis of the spirit in our country. It can rekindle our sense of unity, our confidence in the future, and give our nation and all of us individually a new sense of purpose.

Instead of following Carter's advice, the nation went on a consumption binge under Reagan glorying in big cars and gas guzzlers with a complete abandonment of public transportation and conservation. Conspicuous consumption and self-aggrandizement were in; conservation and self-sacrifice were out. It was morning in America; now, with the disaster in the Gulf, it's midnight. Then with the election of oil men Bush and Cheney we literally immersed ourselves in oil as if it were Holy Water and started wars to make sure that our foreign access to oil was secure.

Cheney cut renewable energy projects and gave Big Oil everything they wanted including the ability to regulate itself. Here's the timeline:

2001:Cheney’s secret energy task force crafts national energy policy. The Bush administration released the National Energy Policy Report on May 16. President Bush appoints Dick Cheney, who was the Chief Financial Officer of Haliburton before taking the VP spot. But he was officially still on Haliburton’s payroll and kept about 430,000 shares in Haliburton stock.

The task force report was based on recommendations provided to Cheney from coal, oil, and nuclear companies and related trade groups—many of which were major contributors to Bush’s presidential campaign and to the Republican Party. The Oil companies— including BP, the National Mining Association, and the American Petroleum Institute—secretly met with the Cheney and his staff.

Only 7 of the 105 recommendations in the plan involved renewable energy. Cheney’s task force report proposed funding the development of “clean energy technologies” by opening up the Arctic National Wildlife Refuge for drilling and earmarking $1.2 billion of bid bonuses from leases in ANWR.

2002:Renewable energy budget cuts. Bush released the fiscal year 2002 budget on April 9 and severly cut clean energy research and development. Solar and renewable energy R&D would drop by more than a third; nuclear energy R&D would be almost halved; and energy conservation R&D would fall by nearly 25 percent.

House energy bill includes $33.5 billion in tax breaks for dirty energy. The House of Representatives on August 2 passed the Securing America’s Future Energy Act, H.R. 4. It included $33.5 billion in tax breaks and other incentives over 10 years for the power industry aimed at increasing oil and gas exploration.

2003:Republican-led Congress backs a House energy bill that includes $23.5 billion in tax breaks for big energy companies. The legislation would hand out $23.5 billion over 10 years in tax breaks to increase oil and gas production and $5.4 billion in subsidies and loan guarantees.

Yet more renewable energy budget cuts. President Bush’s FY 2004 budget once again reduced funding for solar, wind, geothermal, and biomass totaling more than $25 million in cuts.

In 2004, the Republican-led House passes a bill allowing companies to build oil refineries in minority communities. The United States Refinery Revitalization Act passed the House on June 16, but was never made into law.

2005:Yet even more renewable energy budget cuts. President Bush’s FY 2006 budget once again cut energy efficiency and renewable energy programs at the Department of Energy by about 4 percent; cuts totaled nearly $50 million.

Energy bill includes $27 billion for dirty energy. President Bush signed the Energy Policy Act of 2005 on August 8. The bill closely resembled Cheney’s 2001 plan and gave $27 billion to coal, oil and gas, and nuclear, and only $6.4 billion for renewable energy. Amendments in the House and Senate to raise fuel efficiency standards for vehicles failed.

2006:A House-passed bill allows drilling in Arctic Refuge. The House passed the American-Made Energy and Good Jobs Act on May 25, which would open oil leases on the coastal strip of the Arctic National Wildlife Refuge—an area of 1.5 million acres.More budget cuts for renewable energy. President Bush’s 2007 FY budget cut funding for energy conservation by 6.3 percent to $289 million and stopped funding for the geothermal program—although Congress later restored some of this geothermal funding.

2007:Government agency failed to collect more than $865 million in revenues. Investigators from the Interior Department determined that a “top Interior Department official was told nearly three years ago about a legal blunder that allowed drilling companies to avoid billions of dollars in payments for oil and gas pumped from publicly owned waters.”

Yet, still, more budget cuts for renewable energy. President Bush’s fiscal year 2008 budget proposed to cut research funds for efficiency and renewable energy by 16 percent, eliminate them for geothermal energy, and leave funding for solar stagnant.Bush administration opposes expansion of renewable energy.

President Bush also threatened to veto the Energy Independence and Security Act because it included a renewable electricity standard and renewable energy tax credits funded by the elimination of many tax subsidies for major oil companies totaling approximately $13 billion.

Bush administration opposes expansion of renewable energy. President Bush opposed House passage of the Renewable Energy and Energy Conservation Tax Act, H.R. 5351, as advised on February 28.

Bush lifts moratorium on offshore drilling. Bush lifted the executive moratorium on offshore drilling in the eastern Gulf of Mexico and off the Atlantic and Pacific coasts on July 14. This moratorium was put in place in 1990 by Pres. George H.W. Bush. Bush then called on Congress to lift its own annual ban on drilling, as John McCain embraced “drill, baby, drill” that year.

Government agency accepted gifts and engaged in fraternizing and illicit activities. A June 2008 interior general report found that Minerals Management Service officials accepted gifts, engaged in drug use and illicit sex with employees from energy firms, and showed favoritism in handling contracts.

June 12, 2010

You and I are in unanimous agreement about Robert Reich's remarks. The one thing he gets right, as we've also been saying for a quite a long time now, is that middle class wages have been stagnant for 30 years and as he noted, actually dropped in real terms since 2001-07 … that U.S. society is increasingly trapped in a very serious structural unemployment problem.

This explains the culture of 6 credit cards per household (vs. an average of 2 cards in Europe) and massive private borrowing using home assets as security to keep up one’s standard-of-living and to pay for enormous college bills. Our economic model has simply broken down with its over-reliance on Consumption and practically ZERO Savings leading to mushrooming household, national, and trade debt. Reich continues to blindly hold onto the high 70% Consumption panacea as the foundation stone of America’s social-economic model.

Reich fails to research development that American Consumption levels at +70% of GDP (vs. historically much lower 62% in Europe, 4 times higher household savings, more stable/sound GDP/employment growth patterns) are simply NOT structurally sustainable. Rather, they are a patented all-American destructive formula for continued financial bubbles. I wonder how Dr. Reich would explain Dutch Savings jumping to over 16% recently (or 4 times U.S. rate) while unemployment is still half the U.S. rate and Dutch Consumption level is far lower at 60% of GDP! How is this possible? Dr. Reich, Paul Krugman and other recognized economists haven’t directed their objective, penetrating minds to this simple question. In the answer lies some interesting insights of just how structurally unstable the U.S.social-economic model truly is.

Of course wages must rise at least with inflation, but they have not been doing this since 1980 mainly because of Corporate Bigness and its utter indifference to a vibrant working-class Mainstreet America. They gut jobs willingly and joyfully to achieve productivity and cost improvements by outsourcing, downsizing, robotizing, automating ... all to maximize profits for management bonuses and shareholder values. And to Hell with the Rest!

As we have been discussing for some time now, the middle-class must save and buy less from the giants and more from local-regional independent stores; must buy and work more and more entrepreneurially and for employee-employer solidarity represented, for example, by a slowly emerging trend of firms and individuals joining the Cooperative Movement. People are taking a cue for more self-control and personal security from this sensational cooperative development that had its birthplace in the 50s with Spain’s Mondragon Cooperative Corporation – now making some promising moves in America.

As mentioned in my last writing, a much respected French CEO, Maurice Levy, now retiring after 40 years with the Publicis Groupe, got it right in an article entitled, "Fortunately for us, a new generation is rising," when he said:

"The sea-change in values that lies ahead of us will change our way of thinking and acting. What is useful and what is superfluous? What is needed and what is merely wanted? ... Consumption will not be immune to these changes. CONSUME BETTER to CONSUME LESS, RATHER THAN CONSUME MORE for LESS: that will be the new watchword ... Those who bet on the disposable and the temporary will have to think twice."

America needs new ideas and actions to create sustainable jobs and a happier lifestyle in a fair playing field, where LESS CAN OFTEN BE BEST ... particularly when it means being Debt-Sound if not Debt-Free. In short, as I've been pleading for for so long now, we need to drastically rethink our dysfunctional social-economic model and the obsession with high Consumption at almost any cost … something the Reichs and Krugmans appear entirely oblivious to. The only ones profiting from this are the Chinas, Indias and the multinationals.

Two big corporations poured tens of millions into the airwaves for their rip-off schemes, but get no support from CA voters.

June 10, 2010 |

On Tuesday voters squarely rejected two corporate-backed measures that would have cost ordinary Californians millions of dollars.

Proposition 16, cleverly disguised as the Taxpayers' Right to Vote Act, was placed on the state ballot as a constitutional amendment requiring a two-thirds vote to create public power districts or allow local governments to purchase their own renewable power. In other words, it was a way for electric utility behemoth PG&E to further protect its monopoly. PG&E saw such potential for its bottom-line that it spent $45 million to persuade voters to approve the measure. But 52.5 percent of California voters saw through the language and knocked it down.

Similarly, Proposition 17 was framed as an opportunity for auto insurance companies to overturn a state law that prohibits insurance companies from extending "loyalty discounts" to customers even if they switched insurance providers. While Mercury Insurance, which spent nearly $16 million on the measure, claimed this was a way to lower rates for drivers, consumer advocates were successful in making the case that in turn, existing consumer protections would be weakened and insurance companies would be able to charge drivers as much as double premiums for making late payments. Prop. 17 failed, too, with 52.1 percent of voters nixing it.

The success achieved by the underfunded activists at the opposing campaigns -- No on 16 and Stop Prop 17 -- is all the more impressive considering the minuscule amounts of money they spent relative to the corporations that financed the measures. Put simply, the myth-busting worked, even in the face of millions of dollars.

What makes the defeats of Props 16 and 17 especially interesting is that they took place in an election that had an appalling turnout -- about one-third of voters came out -- when corporate money normally has the most sway, says Rick Jacobs, founder and chair of the Courage Campaign, a progressive advocacy group in California with 800,000 active members. "But we saw that people are smart. They looked through the smokescreen these two companies were using and said no," he says.

Jacobs believes the Supreme Court's Citizens United ruling certainly affects voters' views of corporate influence in elections. But he also thinks progressive groups worked to get the vote out in effective ways. His own organization produced a Progressive Voter Guide that was passed around by like-minded groups such as CREDO and MoveOn.org, and was downloaded by at least 100,000 people. (For perspective, Prop. 16 trailed by 185,000 votes; Prop. 17 by 156,000.)

"People actually shared information with each other, and tuned out the expensive ads, and said, 'We're going to trust each other,'" Jacobs says. This shows that "with targeted communication to people who actually vote, you can defeat these things."

But this is only the first fight this year. In November, more moneyed interests will once again attempt to make a mockery of the democratic process in California and trample on progressives' goals.

The Courage Campaign is already gearing up its fight against a still-unnamed measure that would indefinitely suspend California's beacon Clean Energy law. To date, at least 15 oil companies have contributed $1.6 million to the effort. The three largest funders -- Valero, Occidental Petroleum and Tesoro -- all rank in the Political Economy Research Institute's list of the top 100 corporate polluters in the country.

There aren't any other major corporate-backed measures on the November ballot yet, but the budget process isn't yet over in Sacramento, and this makes it likely that a slew of unpleasant initiatives may be added later on.

Activists are looking forward to the Tax Cannabis initiative being on the November ballot. There is hope that it will bring out a whole slew of younger, more progressive-minded voters. In fact, many precincts on Tuesday reported disappointed voters who had turned out to vote for the marijuana legalization measure.

An Ugly Jobs Report, and a Complacent Congress

As if the spread of oil across the Gulf of Mexico was not sufficiently disastrous, the nation's latest job report contained some very bad news.

The Bureau of Labor Statistics report showed a net job loss of 11,000 permanent private-sector jobs in May, according to the Economic Policy Institute. As the EPI pointed out, "The private sector saw very modest growth [in May], adding just 41,000 jobs, much slower than the average growth of the previous three months, which was 146,000."

A quick look at the figures would have been deceiving. Yes, the official jobless rate dropped to 9.7%. But some 411,000 temporary U.S. Census jobs-95% of the growth-will disappear this summer. Three-fourths of the private-sector jobs represented hires by temporary agencies, and permanent-job losses outweighed gains by 11,000, the EPI noted ruefully.

The new numbers provided a jolting injection of reality for those in the Obama White House and elsewhere complacently imagining a smooth economic recovery.

8.2 MILLION JOBLESS AT RISK

The new report ought to light a fire under the Obama Administration and Congress to pass $150 billion legislation for job creation and the extension of health and unemployment compensation benefits for the jobless.

Unemployment benefits are starting to run out for large numbers of the jobless. With the long-running recession starting in December 2007, Congress has repeatedly provided extensions to the standard 26-week limit on unemployment benefits.

At this point, there is a 99-week maximum in states with especially-severe rates of joblessness, and jobless workers are running up against that. "However, without another extension, many of those workers could begin to exhaust those benefits in June," the Economic Policy Institute warns.

EPI economist Heidi Shierholz calculates that some 8.2 million workers could lose benefits this year without a further extension, such as that contained in The American Jobs and Closing Tax Loopholes Act of 2010. If the extension is passed, that would limit the casualties to a still-significant 3.3 million jobless workers losing benefits.

The extension of unemployment benefits coming up next week in Congress is imperative because the typical household headed by an unemployed person had little savings to begin with and may now be cutting back on food to save money, with appalling consequences for family nutrition and health:

Raj Chetty, professor of economics at Harvard University ...said that the median unemployed person has less than $250 in liquid savings at the time of job loss. He also presented a chart showing a sharp drop in food consumption when a person loses his job.

This not only supports other research showing that prolonged unemployment impacts health and even mortality rates, particularly when there is not an adequate safety net in place, but it also helps explain why unemployment insurance dollars are quickly put back into local communities.

But don't be surprised by strident resistance from the Republican Right up in arms over the federal budget deficit. The Right-possibly including some Blue-Dog-type Democrats of the Blanche Lincoln variety-will oppose greater outlays, despite the simple fact that increased federal spending on jobs and benefits for the unemployed are precisely what's needed at this moment to kick-start the economy.

TAXING BILLIIONAIRES

Of course, the American Jobs and Closing Tax Loopholes Act of 2010 will provide the GOP with an opportunity to lash out at deficit-creating Democratic "tax and spend" policies-even with taxes specifically targeted at billionaires,

Moreover, Republican indifference to the plight of the jobless running out of benefits-exemplified by Sen. Jim Bunning's (R-Ky.) infamous "I don't give a sh*t" response-is already evident. With the mid-term elections less than five months away, more cynical Republicans may calculate that a denial of benefits will cause some of the unemployed to lose faith in Democrats, vote Republican-or refrain from voting altogether.

But clearly, the need for more job-creation efforts and help for the jobless is growing more acute by the day. Jobless workers are losing benefits, and mega-banks are simply drawing interest from the Federal Reserve rather than lending out money to fuel the recovery. May actually set a record for home foreclosures. The American economy has increasingly been characterized by minimal job growth, at best.

In this dire context, AFL-CIO President Richard Trumka thundered to Congress, "If you're not for this bill, you're not for jobs. Period. And please, no more excuses about budget deficits unless you're willing to make Wall Street pay its fair share to bring it down."

Roger Bybee is a Milwaukee-based freelance writer and progressive publicity consultant whose work has appeared in numerous national publications and websites, including Z magazine, Dollars & Sense, Yes!, The Progressive, Multinational Monitor, The American Prospect and Foreign Policy in Focus.

WASHINGTON - A panel commissioned by Rep. Barney Frank (D-Mass.) is recommending nearly $1 trillion in cuts to the Pentagon’s budget during the next 10 years.

An Ohio-class nuclear submarine. The Sustainable Defense Task Force, a commission of scholars from a broad ideological spectrum appointed by Frank, the House Financial Services Committee chairman, laid out actions the government could take that could save as much as $960 billion between 2011 and 2020.

The Sustainable Defense Task Force, a commission of scholars from a broad ideological spectrum appointed by Frank, the House Financial Services Committee chairman, laid out actions the government could take that could save as much as $960 billion between 2011 and 2020.

Measures presented by the task force include making significant reductions to the F-35 Joint Strike Fighter program, which has strong support from Defense Secretary Robert Gates; delaying the procurement of a new midair refueling tanker the Air Force has identified as one of its top acquisition priorities; and reducing the Navy’s fleet to 230 ships instead of the 313 eyed by the service.

Shipbuilding has strong support in the congressional defense committees, which write the Pentagon bills. Efforts to reduce the number of ships would run into resistance from the Pentagon and the shipbuilding lobby.

Frank on Friday warned that if he can’t convince Congress to act in the “general direction” of the task force recommendation, “then every other issue will suffer.” Not cutting the Pentagon's budget could lead to higher taxes and spending cuts detrimental to the environment, housing and highway construction.

The acceptance of the recommendations would depend on a “philosophical change" and a “redefinition of the strategy,” Frank said at press conference on Capitol Hill.

He said the creation of the deficit reduction commission offers the best opportunity for the reduction recommendations. Frank wants to convince his colleagues to write to the deficit reduction commission and warn that they would not approve any of the plans suggested by the commission unless reduction of military spending is included.

The task force has looked at various options to trim the Pentagon’s budget in order to reduce the deficit. Those include a reduction in Army and Marine Corps end-strength by cutting back on personnel stationed in Europe and Asia; and rolling back Army and Marine Corps personnel as the wars in Iraq and Afghanistan end.

The panel also looked into reforming military compensation, which could save about $55 billion; saving $60 billion by reforming the military healthcare system; and reducing recruiting expenditures once the wars wind down to preserve about $5 billion.

All of these recommendations would be expected to engender congressional opposition.

The task force also suggested canceling the V-22 Osprey program and the Marine Corps’s troubled Expeditionary Fighting Vehicle.

The U.S. nuclear arsenal would also be on the chopping block, under the panel’s suggestions.

The task force recommends reducing the U.S. nuclear warhead total to 1,050.

Launchers would include 160 Minuteman missiles and seven Ohio-class submarines with 24 missiles (each with five warheads).

The panel also recommends retiring the Air Force bombers — “the bomber leg of the nuclear triad,” which includes land-based missiles and nuclear submarines — and ending work on the Trident II missile.

Frank acknowledged Friday that making cuts to the military’s healthcare system, known as Tricare, would be a “non-starter” with his congressional colleagues. But he said that suggestions on how to handle the nuclear arsenal and missile defense could get a “great deal” of support on the Hill.

Double-dip watch: Retail sales in May took their biggest nose-dive in eight months, according to today’s report from the Commerce Department. Remember: Consumers account for 70 percent of the nation’s economic activity.

American Corporations are sitting on huge piles of cash but they’re not investing, and they’re creating only a measly number of new jobs. And they won’t invest and create jobs until they know there are customers out there to buy what they sell.

For three decades, starting in the late 1970s, the biggest economic problem America faced on an ongoing basis was inflation. Demand always seemed to be on the verge of outrunning the productive capacity of the nation. The Fed had to be ready to raise interest rates to stop the party, as it did on several occasions.

During this era of inflation economics, it appeared that John Maynard Keynes – and his Depression-era concern about chronically inadequate demand — was dead. So-called “supply siders” told policy makers that if they cut taxes on corporations and the wealthy, they’d unleash a torrent of investment and innovation – thereby increasing the productive capacity of the nation. The benefits would trickle down to everyone else.

But the pendulum may now be swinging back to the earlier era in which demand always seems on the verge of trailing the nation’s productive capacity. The biggest ongoing threats are chronic recession or even deflation, because consumers don’t have enough money to [buy] what the economy is capable of selling at full or near-full employment. Despite gains in productivity, little has trickled down to America’s middle class.

John Maynard Keynes is being exhumed because his Depression-era worry about inadequate demand is once again the nation’s central economic problem.

Keynes prescribed two remedies – both of which are now necessary: Government spending to “prime the pump” and get businesses to invest and hire once again. And, as Keynes wrote, “measures for the redistribution of incomes in a way likely to raise the propensity to consume.” Translated: Instead of big tax cuts for corporations and the rich, tax cuts and income supplements for the middle class.

Melting glaciers in Asia could cause food shortages for up to 60 million people who live in the region's major river basins, a new study finds.

But the research, published yesterday in Science, found that the shrinking glaciers will have less of an impact on Asia's freshwater supply than estimated in the last report of the Intergovernmental Panel on Climate Change.

That 2007 report suggested loss of glaciers and snowpack could eventually leave "hundreds of millions" of people in Asia without sufficient water. It has also come under fire for an error-riddled paragraph that claimed Himalayan glaciers could disappear by 2035.

But the new study by researchers in the Netherlands suggests that increased rainfall in some river basins will blunt the effect of the disappearing snow and ice.

The scientists, led by Walter Immerzeel of FutureWater and Utrecht University, examined how climate change will affect five major Asian rivers -- often referred to as the region's "water towers" -- that together supply water to more than 1.4 billion people, roughly one-fifth of the world's population.

They include the Indus, which begins in the Tibetan Plateau and runs through Pakistan; the Ganges, which traverses India and Bangladesh; the Brahmaputra, which winds through the Himalayas into India; the Yangtze and Yellow rivers, which run through China.

But such predictions have been hard to quantify, the new study notes, because of limited data.

Some basins to suffer more than othersThe Dutch research team tackled the problem by examining the role glacial meltwater plays in each river basin, compared with other sources of freshwater -- rainfall and melting snowpack.

They found that the role of meltwater varied widely from basin to basin.

"We show that meltwater is extremely important in the Indus basin and important for the Brahmaputra basin," they wrote, "but plays only a modest role for the Ganges, Yangtze and Yellow rivers."

In the Indus basin, for example, they conclude that meltwater supplies nearly one and a half times more water than does rainfall downstream. But in the Brahmaputra basin, meltwater contributes a quarter of the water supplied by downstream rains.

Given those differences, the scientists said, it's also clear that some basins would suffer more than others in coming decades if climate change continues at its current pace.

Texas commercial fisher-woman Diane Wilson, one of the founders of protest group Code Pink, was arrested on June 9th for interrupting a Senate Energy and Natural Resources Committee hearing on the Gulf oil spill. Wilson doused herself with a jar of syrup, meant to look like oil, in protest of [REPUBLICAN] Senator Lisa Murkowski's blocking of a bill that would lift the maximum amount of money BP is responsible for allocating toward reparations of the oil spill.

WASHINGTON - JUNE 09: Commercial fisher-woman Diane Wilson of Seadrift, Texas, is handcuffed by a U.S. Capitol Police officer after interrupting a Senate Energy and Natural Resources Committee hearing about the BP Deepwater Horizon oil spill by pouring a jar of syrup made to look like oil over herself June 9, 2010 in Washington, DC. Interior Secretary Ken Salazar testified before the committee about the Obama Administration's increased safety regulations of energy exploration on the Outer Continental Shelf in the wake of the ongoing BP Deepwater Horizon oil spill in the Gulf of Mexico. (Photo by Chip Somodevilla/Getty Images)

June 11, 2010

Today’s most important economic news: U.S. household debt fell for the seventh straight quarter in the first three months of 2010 as Americans continued to respond to the recession’s fallout.

But like all economic news, its significance depends on where you’re standing — whether you’re a typical American or someone at the top.

The common wisdom is that excessive debt-financed spending was one of the causes of the recent recession, so the news that household debt is dropping is being celebrated by business cheerleaders as reason to believe we’re on the mend.

Baloney. The reason so many Americans went into such deep debt was because their wages didn’t keep up. The median wage (adjusted for inflation) dropped between 2001 and 2007, the last so-called economic expansion. So the only way typical Americans could keep spending at the rate necessary to keep themselves — and the economy — going was to borrow, especially against the value of their homes. But that borrowing ended when the housing bubble burst.

So now Americans have no choice but to pare back their debt. That’s bad news because consumer spending is 70 percent of the economy. It helps explain why we so few jobs are being created, and why we can’t escape the gravitational pull of the Great Recession without far more government spending.

It’s also a bad omen for the future. The cheerleaders are saying that for too long American consumers lived beyond their means, so the retrenchment in consumer spending is good for the long-term health of the economy. Wrong again. The problem wasn’t that consumers lived beyond their means. It was that their means didn’t keep up with what the growing economy was capable of producing at or near full-employment. A larger and larger share of total income went to people at the top.

So in the longer term, it’s hard to see where the buying power will come from unless America’s vast middle class has more take-home pay. Yet the economy is moving in exactly the opposite direction: Businesses continue to slash payrolls. And the hourly wage of the typical American with a job continues to drop, adjusted for inflation.

Here’s more news: A Federal Reserve report Thursday showed the net worth of Americans rose a fourth straight quarter in January-March. Don’t be fooled by this one either. That increase was almost entirely based on the stock market’s rise in the first quarter. But the market has since fallen back to where it was at the start of the year. More to the point, most Americans don’t have many assets in the stock market. To the extent they have any net worth, it’s in their homes. And home prices continue to languish.

Don’t be fooled by the cheerleaders. The economic news continues to be dismal.